An Alliance Global Partners analyst sees opportunity for big consumer packaged goods or alcohol companies to wade into the pot space
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A recommended warning against alcohol use by the U.S. surgeon general may boost the fortune of cannabis companies — and could lead to some alcohol companies diversifying by adding cannabis to their lineups.
That’s the thesis of Aaron Grey, an analyst at Alliance Global Partners. In a note entitled, “Alcohol Volumes at Risk; Cannabis Offers Growth Opportunities,” Grey mused about a public statement about alcohol causing cancer.
While placing warnings on alcoholic beverages would require an act from Congress, Grey said Friday’s public statement from the surgeon general may fuel the reduced consumption of booze by younger people.
”We believe this could add to the lower alcohol use trend that we have seen in recent years, particularly among younger adults,” Grey said in a research note published Monday. “Through this lens, we anticipate alcohol companies will increasingly look for growth opportunities, with cannabis presenting one of the appealing options, in our view.”
Weekly alcohol use by adults over 21 peaked at 26% in 2012 and fell to 24% in 2022, according to government and industry data compiled by Grey.
Among adults 21 to 29, average monthly alcohol use peaked at 69.2% in 2018 and dropped to 60.3% in 2018.
Meanwhile, weekly cannabis use by all adults has risen from 4% in 2012 to 11% in 2022.
Grey said there’s an opportunity for bigger corporate players to get involved in hemp-based THC beverages in the U.S.
Some bigger corporations have already waded into the space, including Constellation Brands Inc. STZ -0.47%, which has invested in Canopy Growth Corp. CGC -0.51% and British American Tobacco BATS -0.20%, which has backed Canada’s OrganiGram Holdings Inc. OGI -1.13%
Further involvement by bigger companies in the alcohol or consumer packaged goods in state-legal cannabis will likely be hamstrung by the current classification of marijuana as a Schedule I substance under federal law. That’s the same bucket as heroin, LSD and fentanyl.
While the Drug Enforcement Administration has not acted on on a recommendation from the U.S. Department of Health and Human Services to lower cannabis to a less dangerous classification under federal law, President-elect Donald Trump’s pick for secretary of Health and Human Services, Robert F. Kennedy Jr., is seen as more pro-cannabis, Grey said.
“While we acknowledge cannabis sentiment is at all-time lows (particularly from a public stock perspective) and a confluence of factors has limited near-term growth, the long-term thesis of cannabis becoming a mainstream consumer packaged goods product remains intact, in our view,” Grey said.
The AdvisorShares Pure U.S. Cannabis ETF MSOS +0.51% has risen 2.4% so far in 2025, but it fell about 46% in 2024.
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