In honor of April 20, DailyFinance last week outlined a few of the companies that might benefit if California's marijuana legalization initiative passes. Our suggestions -- which largely revolved around media companies, consumer electronics and Oreo cookies -- were based upon several broad generalizations about the consumption habits of marijuana aficionados and the effect of increased appetite on some users.
Unfortunately, generalizations can only take us so far. To get a better understanding of the actual consumption habits of the marijuana demimonde, we decided to ask the experts.
On April 20th, NORML, the National Organization for the Reform of Marijuana Laws, hosted a rally in Union Square. It was a warm, sunny day, and hundreds of New Yorkers came out to show their support for legalization.
Sweet Snacks vs. Savories
When asked about their favorite munchies, the marijuana fans largely broke into two groups: Those who preferred sweet snacks and those who preferred savories. Among the latter group, Doritos were the top choice, indicating that -- if consumption habits remain the same -- California legalization might be a big boon for Frito-Lay and its parent company, Pepsico (PEP). Other favorites, including potato chips, Fritos, Cheetos and Sun Chips, would also help the company. Meanwhile, Nabisco's parent company Kraft Foods (KFT) would benefit from increased sales of Triscuits and Wheat Thins, both of which were popular choices.
Pizza also had a lot of fans, suggesting that Dominos (DPZ), as well as Pizza Hut's parent company, Yum Brands (YUM), could have a nice bounce from legalization. The same goes for McDonald's (MCD) and Burger King (BKC), which many cannabis consumers highlighted as top choices. Cereal was also a popular choice. General Mills's (GIS) Cheerios headed the list, although many respondents also admitted a deep affection for Kellogg's (K) Frosted Flakes.
Among fans of sweet munchies, Oreos was the big favorite, further cementing Kraft's position as a marijuana legalization winner. The same goes for Hershey's (HSY), whose candy bars and chocolate syrup both had strong adherents.
Some of the most popular munchie choices were made by privately held companies: The popular Mars and Three Musketeers bars, for example, are manufactured by Mars, Inc., and Gummi Bears -- another favorite -- are made by Trolli, a division of the Mederer Corporation. Snack cakes are also a dead end: Little Debbies are made by McKee foods, and Twinkies are made by Hostess Brands. Both companies are privately held, so investors won't benefit from a pot bump.
Of course, this entire exercise is based on a few assumptions. It assumes that food habits among marijuana consumers will remain constant, and that legalization will increase consumption. Then again, given the number of former consumers who have quit for fear of losing their jobs, it seems likely that California legalization could bring happy days for millions of cannabis fans -- and their favorite food companies.
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