Legal Weed Is Good for Beer Industry

Major brewing companies have voiced concerns about how legalized marijuana might affect their bottom line, but some market analysts argue that the legalized framework of the cannabis industry is actually giving a boost to the beer industry, despite the hasty conclusions of previous research.

Trevor Stirling, an analyst for Sanford C. Bernstein, recently told Bloomberg that medical marijuana has helped increase beer sales, while the recreational pot markets in Colorado and Washington have shown no signs of having a “significant impact” on beer sales.

“The average blue-collar Bud drinker is less likely to be smoking marijuana,” said Stirling. “As far as medical marijuana is concerned, it does not appear to be a big threat to the beer industry.”

Perhaps the latest report will force the beef of the beer industry, like Anheuser-Busch InBev and SABMiller, to stop blaming legal marijuana for its declining sales, and ultimately sever the heads of the lobbyists who continue to finance campaigns against legalization.

The reality is while beer sales have slipped in the past five years, the majority of this is due to substantial unemployment rates and the move by the average drinker from beer to hard liquor. Yet, there is no indication that marijuana could stand to cripple the beer industry.

Interestingly, Stirling found that in 10 of the largest states to legalize medical marijuana, beer drinking initially experienced a 0.5 percent increase, followed by a plateau that is more consistent with the national average.

“There may be a ’constrained budget’ effect for some consumers, but legalized recreational weed is likely to lead to lower prices in the long term, potentially freeing up more cash either for more weed or more beer,” he said.

Previous studies, however, have shown that medical marijuana has caused the brewing industry to take a hit. Researchers from Montana State University, the University of Oregon and the University of Colorado Denver recently determined that alcohol sales dropped off by about 5 percent due to legalized marijuana, with the authors suggesting the two inebriants were substitutes for each other – a conclusion that does not appear to be entirely accurate.

In addition, Stirling says that if the United States government repeals prohibition, it will provide an enormous boost for many industries, including major restaurant chains.