Pot smoking gains on booze as teens' favorite vice

Drinking 'remains on the decline and at record lows'

The vices of teenagers are changing.

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Increasingly, adolescents are ditching booze in favor of cannabis, according to the University of Michigan’s “Monitoring the Future” survey.

“In comparing social lubricants, alcohol incidence remains on the decline and at record lows,” wrote a team of New York-based analysts at the investment bank Cowen & Co., adding that “teenage cannabis consumption has interestingly remained fairly steady.”

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In 1992, 51 percent of 12th-graders said they had drunk alcohol in the past 30 days, a number that had dwindled to 29 percent in 2019. On the flipside, marijuana smoking by high school seniors over a 30-day period surged from 12 percent to 22 percent in the same period.

Data from the Centers for Disease Control and Prevention shows binge-drinking sessions per month dropping in states that allow adult use of marijuana "relative to non-cannabis states,” the firm noted. Marijuana is legal for recreational use in 11 U.S. states with Illinois set to become the 12th on Jan. 1.

The shifting preferences have big implications for beer brewers, which have been losing market share for the past nine years. Beer sales grew 1.8 percent in 2018, while liquor sales increased 5.1 percent. Both lagged far behind hard seltzer sales, which more than tripled

Despite teenagers’ preferences shifting away from beer, Cowen is still positive on a number of brewers due to their exposure to other products.

Cowen maintained its “outperform” rating for Constellation Brands, which is “reshaping” its wine and spirits portfolio to “establish a business of higher-growth, higher-margin brands.”

The firm also has kept its “outperform” rating for Boston Beer Co. despite the difficulties in its core beer business. Boston Beer benefits from its “exposure to the rapidly growing hard seltzer category” through Truly, which has a market share of 20-25 percent, the analysts said.

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Cowen is less enthusiastic about Molson Coors, maintaining a “market perform” rating due to its dependency on “mainstream beer,” which “continues to cede share within the overall category.”