Liquor companies have reason to fear marijuana legalization, which enjoyed its first successes in states famous for brewers by positioning cannabis as a safer alternative to alcohol.
If “marijuana is safer” could win over voters in Coors’ own backyard, surely the argument would resonate elsewhere. This would explain why brewers and liquor interests contributed at least $35,000 to anti-legalization efforts this fall, as The Intercept first noticed.
Indeed, with legalization on the Massachusetts ballot, the leadership of the Boston Beer Company, which brews Sam Adams and its Boston Lager, told its investors that “legal marijuana usage” could possibly “adversely impact the demand” for beer.
They were right. According to a senior analyst with a New York City investment bank who tracks market data, beer sales in states with legalized adult-use cannabis sales are dropping.
Sales in Oregon, Washington, and Colorado—states where high-hopped IPAs as well as golden lager are de-facto state symbols—have all suffered since cannabis was legalized, according to Vivien Azer, an analyst with Cowen and Company.
Beer sales have fallen by as much as two percent across the board in those states, with macrobreweries being hit the hardest, according to Brewbound. Beer sales in those states were already lagging behind national trends, Azer noted, and the decline has only increased since cannabis became legal.
It’s worth mentioning not every brewer has felt the same hit. Liquor store representatives told The Guardian in 2015 that they had experienced no appreciable drop in sales, and state sales tax data showed an increase in alcohol sales.
And keep in mind alcohol sales in the U.S. top nearly $220 billion every year, so a decline of two percent is just the beer spilled on the assembly line.
Still, news of the slow sales follow other data points that predicted such a decline, including 18-to-25 year-olds reporting more cannabis use and all age demographics reporting less alcohol use. Legalization, then, may not have been the chief cause for the decline, but surely contributed.
Mainstream beer producers are seeing their sales of their wheelhouse products, “premium domestics” like Coors Light and Bud Light, decline by 4.4 percent, according to Azer. And in Denver, where cannabis consumption lounges will soon be legal, total beer sales are down 6.4 percent, with craft brew sales down 5 percent.
All three of those western states are “craft beer meccas,” yet even sales of craft beer are in trouble. Colorado may have achieved “peak beer,” with craft sales there in decline.
It appears domestic beer companies are the ones hardest hit by legalization. Sales of imported alcohol are still growing nationally, with imports from Mexico particularly strong—but not in the three western states where a retail cannabis market has been a reality for the past few years.
The reasons for the decline are still unclear, as is its future. It’s unlikely anyone with a longstanding drinking habit is going to immediately change his or her lifestyle just as legalization hits, and until cannabis lounges are a legal reality across the country, alcohol cannot be supplanted as America’s social drug of choice. Drinking culture is simply too deeply ingrained… or is it?
As a recent New York University study found, marijuana use has increased 71 percent in adults aged 50 and over. If Baby Boomers drop the Mad Men act and rediscover the once-forbidden tonic of their youths, alcohol’s woes may just be beginning.
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