The marijuana re-legalization movement has come a long way, sort of. California has medical marijuana, yet the federal government seems to be doing its darndest to eliminate that bastion of medical liberty. New York City has long since decriminalized, but remains the arrest capital of the world when it comes to the herb. I’ve long since given up any real hope that substantial progress will be obtained strictly through the ballot box, at least at the federal level. I’ve adopted the motto, and tweet it often, “Forget Congress, its about commerce”
But how do you flex your commercial muscles in support of an illicit substance? If you offer positive support by patronizing the existing infrastructure you still risk incarceration most states in the U.S. and in many other countries. An alternative is to withdraw support from those who benefit from the prohibition of marijuana, which is where we have chosen to focus. In this case, those that manufacture, distribute, and sell alcohol are some of the main beneficiaries of the federal ban on weed, although one could include sweetened, carbonated beverages (soda) as well. If someone were to consume water instead of alcohol on a given night, it seems like that would be a small hit to brewers, vintners, and distillers.
One hit to the folks that make alcohol isn’t going to make a significant impact. What we need is a little leverage, which is where the UTWIF project comes in. According to this article in QSR Magazine ( http://www.qsrmagazine.com/news/restaurant-beer-sales-shot-9-percent-2011 ) restaurant sales accounted for 24% of total beer sales. But the funny thing about restaurants is that they make a good chunk of their profits from the sale of alcohol and soft drinks. s.
Take a look at this sample restaurant income statement. (http://www.foodservicewarehouse.com/restaurant-equipment-supply-marketing-articles/restaurant-management-and-operations/the-restaurant-profit-and-loss-pl-statement-/c28015.aspx)
Gross profits from the sale of alcoholic beverages and sodas account for over 80% of total profits in this sample income statement. This certainly isn’t a perfect way to look at this situation, because it takes overhead into account after gross profit, without attributing any of the overhead cost to beverage sales, but its an okay starting point.
Ok, so where does the leverage come in you ask? Well, if you can start shutting down restaurants because they can’t sell enough alcohol and fizzy drinks to make operations worthwhile, the beer, wine, and liquor companies not only lose the opportunity to sell to you, but they also lose the opportunity to sell to all of the other customers at those restaurants. That is the first level of leverage.
But there is another aspect that comes into play. If a beer company has publicly traded shares, the value of those shares are typically determined by the earnings of a company, as well as the growth rate of that company’s earnings, among a few other variables. The higher the expected growth rate of a company’s earnings, the higher the company’s share price, all other things equal. Helping to reduce the expectation of the company’s growth rate with a headwind provided by reduction of alcohol and soda consumption from cannabis users could have an impact on share prices.
So how do I propose people begin to have an impact in this way? Its fairly simple. I would say that cannabis users just simply stop buying alcohol and carbonated beverages, especially when they go to restaurants. But just as importantly, when you choose to not consume these beverages, leave a non-drink ticket behind, so that management knows that you did it and why you did it.
If they don’t realize why their beverage sales are down, they can’t quantify what sort of impact cannabis consumers have on their business. At the end of the day, week, or year, they will have a stack of tickets where a stack of cash would have been.
But what if a restaurant supports legalization or reform? If a restaurant supports reform, they should let their customers know. How would you know they support legalization? Well, how do you know they take credit cards? They have a sign that tells you when you walk in the door? How do you know they won an award for best burger in the city? They put it on a sign and display it by the bar or on their website. That’s what we’re looking for here. They don’t have to hit you over the head with it, but a sign would be good. Something like this window cling perhaps:
heck, we’ve got a bunch of these static adhesive stickers printed already, so if you’re a restaurant owner, send us an email with a postal address at utwif2012 at gmail <dot> com or tweet us at @utwif.
Just to be clear, UTWIF is not anti-restaurant, or anti-alcohol. Most of the people we know employed by the food industry smoke fair bit of weed. Having a few drinks can be a nice way to spend an evening with friends. But there is a harsh asymmetry in the legal status of marijuana, alcohol, and caffeine. We just want those who benefit from that asymmetry to give back a little support to their cannabis-consuming customers. And maybe if you save a few dollars by not buying as many drinks, you can flow a few bucks to one of the groups working for law reform.
Thanks for stopping by.