Are beer industry’s sales taking a hit due to legal marijuana?

Are beer industry’s sales taking a hit due to legal marijuana?

VicesApril 28, 2017 By Lindsey Kline

It’s a seemingly insignificant choice: crack a beer or roll a joint?

This decision might not matter much to you, but for breweries and dispensaries around the nation, your choice is crucial. If you reach for the rolling papers instead of the Coors, your selection signifies much more than one overworked individual choosing weed to unwind. It represents the American masses. It translates into billions of dollars. It could make or break countless bud or booze businesses.

Your choice is a simple economic calculation. You want to take your mind off of everyday worries, enjoy a mind-altering substance with some close friends, or get totally wrecked at a concert, a bar, or some stranger’s house party where sobriety is simply not an option. Both cannabis and beer can do the job. But when you substitute one over the other, the market becomes a zero-sum game — every dispensary’s profit becomes a brewery’s loss, and every bong rip puts the beer industry’s green up in smoke.

At least, this is the sincere fear unfolding among Big Beer’s employees and investors, who suspect marijuana legalization could cripple their enterprise’s prosperity. What’s worse, a number of studies reinforce these concerns. According to a new report by the Cannabiz Consumer Group, the beer industry could lose more than $2 billion in retail sales due to legal marijuana.  The report estimates that 27 percent of beer drinkers have already substituted cannabis for beer or would make that switch if marijuana was legal in their state.

The booze producers suffering the hardest hits are domestic brewers like Anheuser Busch (Budweiser, Busch, Natural Light) and MillerCoors (Coors, Keystone, Miller Lite). Sales of these companies’ premium brews, like Coors Light and Bud Light, dipped by 4.4 percent this past year. Although this slump in sales might sound meager, it equates to nearly $135 million in American revenue lost.

It seems intuitive that legal cannabis could damage Big Beer conglomerates more than microbreweries. For the most part, consumers of cheap beers like Natty Light or Keystone aren’t drinking this watered-down alternative out of sheer pleasure — they’re doing it to get fucked up. If cannabis can achieve a comparable altered state of mind without the belching and bloating, it’s no wonder that they’d choose bud over Bud Light.

Craft brews, on the other hand, aren’t necessarily consumed for the purpose of getting plastered. They’re generally more flavorful and rich in body, and consequently difficult to chug. Enjoying a craft beer is a slow and leisurely process that is commonly concerned more with taste than intoxication. Cannabis, therefore, is often not a credible alternative for craft beer.

Craft beer could also play a part in the reduction of domestic beer sales. However, specifically in states with abundant dispenasaries, microbrews apparently share the blame with marijuana. While the craft beer industry as a whole is growing, microbrew sales are actually dragging behind in states with legal recreational cannabis.

Research firm Cowen and Company analyzed the beer industry in states with well-established weed retail infrastructure (ie. dispensaries for days) such as Colorado, Oregon, and Washington. Its study found that in those states, beer markets have "collectively underperformed" over the last two years, trailing behind beer sales around the country.

The Cowen and Co. study claimed that craft breweries in cannabis states aren't performing as well as their counterparts around the nation. Denver, in particular, has reportedly seen the most prominent drop, with total beer volumes plummeting by 6.4 percent.

Of course, the seemingly counteractive relationship between bud and booze can achieve an equilibrium. As many of us have already discovered, weed and beer can pair well together. Plenty of people choose to combine both commodities, reserving each for a separate occasion or self-indulging with a buzz and a high at the same damn time. These hedonists are subsidizing each industry with their debaucherous habits, supporting our favorite vices and offering the simplest solution to this beer/bud give-and-take.

It’s true that as legal marijuana sweeps the states, the thrilling originality of a new intoxicant might steal some attention from our beloved brews, but the buzz won’t last forever. Once the novelty wears away, young Americans will come crawling back to beer, begging for forgiveness. The budding relationship might have hit a rough patch, but in time, we believe cannabis and beer will live together in happy harmony.