Will Legal Marijuana Really Cost the Brewing Industry Billions?
Some reports show that legal weed is hurting beer sales, while others suggests the contrary.
Published on March 14, 2017

The brewing industry could suffer the loss of more than $2 billion in retail sales, if the legalization of marijuana continues to become more widespread across the United States.

At least this is the consensus of the latest market analysis by Cannabiz Consumer Group (CCG).

Researchers at CCG found that 27 percent of the beer drinkers out there have either already opted for cannabis over booze or are planning to do so in the not so distant future. This switching of inebriants, the study shows, could eventually cause beer revenues to drop by more than 7 percent. Manufacturers of hard liquor and wine would of course also take a hit.

However, researchers have also said that people would likely only switch from booze to legal marijuana until the “novelty” of legalization runs its course. After all, it is difficult to compare an industry that is only permitted to operate in a handful of legal states to one that is prevalent in nearly every restaurant, watering hole and sporting venue in the nation.

In truth, the cannabis industry seems to have a long way to go before it truly becomes a substantial threat to the sale of alcohol. The booze industry in the United States alone generates more than $400 billion in total economic activity and it has created nearly 4 million jobs – making it one of the largest contributors to the U.S. economy.

The latest predictions show the cannabis industry could be worth $25 billion by 2020 – a far cry from a threat.

But this is not the first time a report has emerged suggesting the brewing industry could lose profits because of legal weed. Earlier last year, research firm Cowen & Company found the craft beer sales in legal states like Colorado and Washington were not as competitive now that marijuana is legally available through retail outlets.

“In adult-use cannabis markets, there are clear signs that cannabis is weighing on beer category trends,” said Vivien Azer, managing director and senior research analyst for Cowen and Company.

Yet, a conflicting report from Forbes, which was based on an analysis of Colorado’s excise taxes for 2016, found that legal weed was not hurting the alcoholic beverage industry at all – if anything, it is helping it become stronger.

The report shows that taxes collected on the sale of beer climbed by 4.5 percent last year, while wine and spirits experienced a 3.3 percent and 4 percent growth, respectively.

“It's possible that on certain occasions like 4/20 and the fourth of July, consumers switch to cannabis, but overall alcohol is thriving in Colorado,” wrote Forbes contributor Debra Borchardt.

Interestingly, another report published earlier this year by market analysis firm Bernstein found that all of the noise about legal weed hurting the brewing industry seems to be a bunch of propaganda. In fact, the report concluded that, “beer and weed are complements rather than substitutes.”

Mike Adams
Mike Adams is a contributing writer for MERRY JANE. He also writes for High Times Magazine and Cannabis Now. You can follow him on Twitter @adamssoup and on
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