5 Fast-Food Companies Ready to Sizzle From California’s Weed Legalization

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Peyton Manning, former all-star quarterback and proud owner of some 30 Papa John’s Int’l Inc. (PZZA – Get Report)  franchises, caused a stir three years ago when he boasted about roaring sales at his Colorado eateries following the state’s legalization of recreational marijuana.

“There’s some different laws out here in Colorado. Pizza business is pretty good out here, believe it or not, due to some recent law changes,” Manning told Sports Illustrated, after the law took effect.

Marijuana-induced “munchies,” it turns out, are a biological phenomenon. Weed makes us think we’re hungry because of THC, which is produced in cannabis, stimulates the cannabinoid receptors in our brain that control appetite, mood and pain reception, according to a 2015 study in Nature Neuroscience.

That’s why chains like Jack in the Box Inc. (JACK – Get Report) are launching national campaigns to cater to stoned, hungry consumers with strategic partnerships ahead of California’s legalization of selling and using weed. Such plays could even drive sales outside California, according to John Gordon, principal at Pacific Management Consulting Group.

“This won’t work in Topeka,” he told TheStreet via email, but could as a secondary [marketing] message for restaurants that value pot-friendly demographics.

Starting, Monday, Jan. 1, Californians can legally possess, sell and distribute weed under, as long as they follow certain guidelines.

So, what are some of the restaurant chain that will capitalize — intentionally or not — on what’s estimated to be a $5 billion market? Here’s our take.

Jack in the Box

True to its SoCal roots, Jack in the Box announced Thursday, Dec. 28, a partnership with Snoop Dogg’s weed-centric digital media company on a limited-time Merry Munchie Meal to celebrate and profit from the state’s new law.

his partnership is one more way for us to connect with [our customers] whether you’re at a concert, up late playing video games or pulling an all-nighter,” said Jack’s Chief Marketing Officer Iwona Alter, in a statement.

For $4.20, customers in Long Beach, Calif. — Snoop’s hometown — get two tacos, curly and regular fries, three chicken strips, five mini churros and a soft drink. If that’s not enough to cure a classic case of the munchies, what else could?

Taco Bell

This one is too obvious. Owned by Yum! Brands Inc. (YUM – Get Report) , Taco Bell has been catering to the late-night munchies crowd since 2010, as seen in its older commercials.

Derek Peterson, founder and CEO of luxury weed brand IVXX, a banner under Terra Tech Corp. (TRTC) , told TheStreet that he has seen extra foot traffic at the Taco Bell next door to a Terra Tech dispensary in Oakland, Calif.

“About 50 yards from us was a gross old Taco Bell. About a year after we opened, they tore the place down and built a completely new and gorgeous storefront,” Peterson said. “They must have seen a surge in business to make that sort of capital investment.”

Taco Bell, in fact, is the second-most popular fast food chain among stoned patrons, a September survey by marijuana research firm Green Market Report found. Of 27,500 respondents, 18% visited Taco Bell within four weeks of buying legal weed from a dispensary. But the No. 1 pick for the hungry and high is, of course, McDonald’s Corporation (MCD – Get Report) .

McDonald’s

A whopping 43% of respondents in the Green Market Report said they’ve visited McDonald’s after buying weed. Given the chain’s prolific presence in the U.S. as well as its unbeatably cheap prices (two Big Macs for $5), it’s no wonder Mickey D’s is the go-to for beating the weed munchies.

The chain’s well-known association with weed, in fact, inspired a viral spoof news story in 2015 that suggested some franchises in Colorado converted their play areas into smoking sections with futuristic pods. This may not be the worst idea, perhaps, for newer restaurants vying for market share.

In-N-Out Burger

If you live outside of California, you may have never eaten at an In-N-Out Burger, but the family-owned private chain is a touchstone of Cali culture and a favorite of potheads, according to Peterson. “This is the go-to spot in California, and what I personally crave.”

GrubHub, PostMates, etc.

Okay, so these aren’t technically restaurants, but it’s more than intuitive that delivery apps like GrubHub, PostMates and Uber Eats will benefit from legalized recreational marijuana use.

“In days past, the only choices for munchies delivery were a handful of local restaurants or fast food,” one weed-loving author wrote in Merry Jane, Snoop Dogg’s aforementioned online publication. “Now, with apps like Amazon Now, Caviar, Postmates, Seamless, Grubhub, Delivery Dudes and more, high-class munchies are just a few screen taps away.”

And Beyond

Burger chains and delivery apps won’t be the only ones to reap the benefits of weed legalization. It’s an opportunity for the entire food service sector, industry sources say, including fine dining and catering.

“This state is loaded with incredible food and chefs, and many have already set their sights on cuisines and dining experiences to both complement a high and infuse cannabis into the food itself,” said Jason Santos, CEO of a marijuana-focused Netflix-type entertainment platform called BurnTV.

“These types of experiences have long gone on in private homes, mansions, rented pop-up spaces, etc.,” added Santos. “As California continues to move forward, we will see permanent cannabis food experience restaurants come into the fold.”

Restaurants in the Bay Area area now offer food-and-weed pairings, according to Peterson, as those in Denver did when Colorado legalized recreational cannabis.

“Weed really does make everything taste better. It’s why cancer patients use it to stimulate appetite and why you’re seeing a lot of high-profile chefs doing these pairings like they would with wine,” Santos added. “It’s such a nice thing, because you get to focus on the sensory aspects of eating.”

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