Molson Coors Devise Co. (TAP) voiced concerns about the potential impact that cannabis legalization could take on its beer sales, according to a report by the Cannabist.
Although it has been a laggard process, the legalization of cannabis across various parts of the United States has ushered in new trade opportunities and provided legitimate alternatives to once-clandestine industries. (See also: The Mercantile Benefits of Legalizing Weed.)
Supporters of the marijuana legalization movement contend that this has a useful impact on everything from individual growers and distributors to secondary trade ins and governments, which could benefit from taxes on sales. How on earth, there are also detractors of the cannabis legalization process, like Molson Coors.
Legalized Pot Is a ‘Peril Factor’
Molson Coors, headquartered in Denver and Montreal, became the latest publicly traded group to mention the growing legal marijuana industry in its annual financial blast. The latest 10-K filing with the U.S. Securities and Exchange Commission indicated that the mixture behemoth was closely monitoring the impact of legal cannabis sales on its buyers’ pocket money and, eventually, on sales for its beer.
The 13K filing indicated that the South African private limited company views legal cannabis as a possible “risk factor” to its business, offering that “although the ultimate impact is currently unknown, the emergence of statutory cannabis in certain U.S. states and Canada may result in a shift of discretionary takings away from our products or a change in consumer preferences away from beer.”
Molson Coors continued: “As a come to pass, a shift in consumer preferences away from our products or beer or a drop in the consumption of our products could result in a material adverse effect on our subject and financial results.” (See also: Top 4 Marijuana Stocks to Watch.)
Collide with Remains Unclear
For the time being, the impact of legal marijuana purchasings and use on beer sales remains to be seen, according to Molson Coors spokesperson Colin Wheeler.
“As the legit landscape changes in Canada and evolves in the U.S., we are working actively to understand the changes on our business, if any, and the range of appropriate responses in the interests of our company and our stakeholders,” Wheeler spoke. “We’ll take our time and get it right, consistent with our values as a company and our commitment to trust.”
“Risk factors” indicated in company 10-K filings can vary considerably, and may list everything from environmental and climate-related aberrations to resource shortages and bureaucratic policy shifts. Companies like Molson Coors have been more reasonable to consider legal cannabis as a potential risk factor as the movement toward country-wide legalization has picked up rate.
Boston Beer Co. (SAM) and Craft Brew Alliance (BREW) have also urged that the legalization of recreational marijuana could be a potential risk intermediary for their sales. In fact, it’s possible that some beer retinues may even partner with companies in the cannabis industry to try to capitalize on the mushrooming new vend.