Will Legal Marijuana Impact Beer Sales?

cannibis-beer-plant

“Beer is art”

It’s something you’ve likely heard at some point in time. If you’re like me, there’s even a good chance that sipping on an otherworldly creation from malt and hops has made you feel that way.

But beer is also just beer.

Sometimes, it’s something to be savored. Sometimes, it’s the means to a relaxed end. In that regard, it’s only one of many ways to catch a buzz. For some states, however, the threat of what wine and spirits steal from beer may also be padded by legalized marijuana.

In Washington State, pot is selling fast, and while it’s not necessarily cause and effect, dollar sales are catching up to spirits:

In the first quarter of 2016 — January, February and March — people spent $54.8 million more on spirits than marijuana, which includes the cost of the products and its associated taxes. By the second quarter — April, May and June — that gap closed to nearly $37 million.

In the second quarter, comparative sales sat at $247 million of spirits to $212 million for pot. While third quarter stats for spirits won’t be released until 2017, marijuana increased even more to $278.6 million, buoyed by additional sales as the state closed medical marijuana stores.

There still needs to be more information before a trend can be established, but it’s at worth noting the impact on beer, too. According to a report by Cowen and Company and shared by Brewbound, beer is underperforming in Colorado, Oregon and Washington, states with legalized pot sales.

Total beer sales are down. Craft beer is slowing. Macro is suffering. Marijuana use is increasing among beer’s most important demographic, Millennials, which is “coupled with declines in alcohol incidence,” according to the report.

In Denver, for example, beer volumes are down “6.4 percent year-to-date and craft beer volumes have dipped five percent.” Of note: Colorado’s marijuana sales hit a record high (*sly look*) of $122.7 million in July, selling $5.3 million more than April, with 4/20 celebrations abound. Denver holds half the state’s licenses to sell marijuana and sales of cannabis was up 20 percent in the city this summer, compared to 2015.

denver-marijuana-sales

In terms of trends, the sale of marijuana in Denver and Colorado is strong. But in such a beer-soaked state, is there a real problem to be worried about? According to the amount of beer being sold at breweries, not at all. Per numbers reported to the TTB, Colorado breweries saw an increase of 60 percent of “own-premise” sales from 2014 to 2015. It would be safe to assume those figures would continue to grow for the Centennial State.

But still, it’s about what *could* happen in the future. If anything, these findings about pot’s growth alongside alcoholic beverages can emphasize one part of what beer is just as much as marijuana: recreational.

An ongoing assumption beer enthusiasts make is that their social circles and/or knowledge is representative of the broader base of drinkers. People turn to “craft” beer because it’s special! Everyone appreciates the nuance of a barrel-aged quad!

As suggested time and time again, that is not so. Beer doesn’t always have to be art. For some, it doesn’t always have to be a high-end endeavor, either. Maybe beer can just be beer.

When it comes to finding a buzz, what if some people start seeing it not about the journey, but merely the destination?

Bryan Roth
“Don’t drink to get drunk. Drink to enjoy life.” — Jack Kerouac

Editor’s note: To nip any worries in the bud (*sly look*), note that I’m aware cannabis has more uses than recreational ones. I have seen the positive impact it can have on friends and family who have required it for medical reasons. For purposes of this post, I simply wanted to focus on what may be business ramifications and any common denominators that may be assumed across alcohol and marijuana sales.

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3 thoughts on “Will Legal Marijuana Impact Beer Sales?

  1. How do these trends relate to other very mature beer states? (It *is* curious that the three states you pointed to that have legalized it are also national leaders in brewing.) What’s the trend in Wisconsin, Vermont, and Maine? We’re seeing a national slowdown in growth, so you would expect states with saturated sales to be most vulnerable to these trends. Is the cause ganja or something more global?

    • Interestingly (or unfortunately), it’d probably be worthwhile to compare aspects of beer brand tiers to compare. For these states with a baked in culture (*sly look*) of beer, I’d imagine the smaller “craft” isn’t suffering. What it ultimately may come down to is some Venn diagram of options for a “relaxed state” and disposable income? So interesting to watch.

  2. Pingback: Here’s a Fun Way to Increase ‘Craft’ Beer’s Market Share | This Is Why I'm Drunk

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