Beer sales could take a huge hit if more states legalize recreational marijuana. A new report from Cannabiz Consumer Group (C2G) predicts that the beer industry could lose more than $2 billion in retail sales due to legal marijuana.
The company reported that 27% of beer drinkers said they have already substituted cannabis for beer or would make that switch if marijuana was legal in their state. Wine and spirits sales could see a drop in sales.
C2G noted that some believe the substitution would be short-lived since the novelty of legalized marijuana would wear off. That said, they said that the cannabis consumer is an invested and educated shopper.
A report from Cowen & Co research analysts issued in September concurs with this assessment. “While recreational cannabis has only limited availability, the rise of cannabis consumption more broadly looks to be weighing on alcoholic beverage consumption, where it is now in decline for men and higher income consumers (while cannabis has gained considerable share with this cohort over the last 5 years),” the report states. With regards to the existing states where marijuana is legal, the analysts said, “With all three of these states now having fully implemented a [marijuana] retail infrastructure, the underperformance of beer in these markets has worsened over the course of 2016.” [Read more at Forbes]