Whiskey Company Scales Back Operations, Citing ‘Consumer Shifts’ Toward Marijuana As Alcohol Alternative

A popular independent craft spirits distillery says it’s scaling back its
operations—due in part to the fact that more adults are choosing marijuana
over alcohol.

Heritage Distilling Company, Inc.–which has distillery locations for its
whiskey and other spirits in Oregon and Washington State where cannabis is
legal—said on Thursday that a confluence of factors informed its decision
to close tasting rooms, shift to contract production partnerships and focus
on direct-to-consumer sales.

The company listed four specific considerations that led to the
consolidation of its operations. That includes “consumer shifts toward
reduced alcohol consumption and alternative products, including marijuana.”

That shift is being closely monitored across the alcohol industry. Earlier
this year, the CEO of Brown-Forman Corporation, which produces brands such
as Jack Daniel’s and Woodford Reserve, said that the growing use of
marijuana as an alternative to alcohol is putting “pressure” on the spirits
industry.

This week, new congressional lobbying reports shows that many major
companies such as Anheuser-Busch, Bacardi North America and Moet Hennessy
USA are engaged in federal lobbying to influence cannabis policy amid the
surge in interest into THC beverages.

“For more than a decade, Heritage Distilling tasting rooms were places for
friends and family to gather to enjoy each other’s company and great
spirits,” Jennifer Stiefel, president of Heritage Distilling, said in a
press release on Thursday. “As we head into the final stretch of the year,
we wanted to give our customers and club members two months of lead time to
plan their final visits to our tasting rooms, to share in great memories
and to thank the staff who helped them along their customer journey.”

The company also listed tax and regulatory challenges in Oregon and
Washington State as additional reasons for the business model change.

The fact that evolving consumer preferences for cannabis factored into the
decision isn’t entirely surprising, as there have been many recent market
analyses and surveys indicating that marijuana legalization has proved to
be a disruptive force for the alcohol industry.

A poll released earlier this month found that a majority of Americans
believe marijuana represents a “healthier option” than alcohol—and most
also expect cannabis to be legal in all 50 states within the next five
years.

Another recent survey showed that four in five adults who drink
cannabis-infused beverages say they’ve reduced their alcohol intake—and
more than a fifth have quit drinking alcohol altogether.

That survey was released shortly after a leading alcohol industry group added
a company that makes THC-infused drinks to its membership roster for the
first time, furthering signaling the cultural shift.

This also comes at a time when younger Americans are increasingly using
cannabis-infused beverages as a substitute for alcohol—with one in three
millennials and Gen Z workers choosing THC drinks over booze for after-work
activities like happy hours, according to a new poll of 1,000 young
professionals.

This month it was revealed that the retail giant Target is soft launching
sales of THC-infused beverages at select stores in Minnesota.

Meanwhile, Veterans of Foreign Wars (VFW) of the United States recently
entered a first-of-its-kind partnership with a hemp THC beverage company,
with a licensing branding deal that will support a variety of veterans
services and promote cannabis drinks as a potential alcohol alternative
with the drinks being available at VFW posts across the country.

Separately, while Target is apparently moving into the THC drink space, the
airline Virgin Atlantic denied satirical and false claims earlier this year
from a cannabis beverage company about a deal to sell its THC-infused
beverages on flights.

The post Whiskey Company Scales Back Operations, Citing ‘Consumer Shifts’
Toward Marijuana As Alcohol Alternative appeared first on Marijuana Moment.