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Mar 29, 2017 12:10 PM

5 Outcomes of Marijuana Legalization for Beer Industry

Marijuana legalization is disappointing beer producers as it is slowly but steadily changing people's needs. Currently, one in four people opt for marijuana instead of beer in the U.S., new research has recently found. The number of beer consumers is rapidly shrinking in the states that legalized recreational weed, including Washington, Oregon, and Colorado.


Cannabiz Consumer Group (C2G) has recently released a new study investigating marijuana as a factor reducing beer sales. The research involved 40,000 participants and was based on the data of more than 55 million of marijuana sales transactions.

According to the company's spokesperson, people consume weed for medical, recreational, and social purposes. Beer producers have faced the risk of losing sales because of marijuana legalization. However, they can take a variety of measures to offset the decline in revenue.

Another study carried out by Cowen and Company also investigated the correlation between beer and marijuana sales in states with legal recreational weed between 2014 and 2016. Similar to C2G's research, this study attributed the decrease in beer sales to the increase in pot consumption. Here are the five outcomes of marijuana legalization for the beer industry outlined in both studies.

1. The number of marijuana consumers is rapidly increasing in the U.S.

Last year's statistics showed that there were 24.6 million legal marijuana users in America. Considering that, C2G predicts that the marijuana market has a potential of $50 billion of annual revenue. Meanwhile, the beer market brings twice as much, but it has already reduced in the states that legalized recreational marijuana.

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2. Marijuana sales reduce beer revenue

Marijuana sales are causing a steady reduction of beer revenue, and C2G found that it had already decreased beer sales by more than 7 percent. Moreover, the findings revealed that 27 percent of former beer drinkers reported that they substituted marijuana for beer. C2G suggested that if weed were legal in all states of America, the beer industry would be short of $2 billion in revenue.

3. Largest beer companies bear losses

Even the major beer companies suffer losses because of the sales reduction. Cowen and Company's study revealed that the sales of Coors Light and Bud Light beer reduced by 4 percent, while Budweiser sales dropped over 2 percent. The main reason for this decline was marijuana legalization.

Beer Producers Suffer From Legal Recreational Marijuana
Beer Producers Suffer From Legal Recreational Marijuana
Recreational marijuana, which has been recently legalized in four more American states, has already influenced beer sales in Washington, Colorado, and Oregon. According to the latest industry research conducted by Cowen and Company, alcohol demand in these states has decreased by more than 4% this year.

4. Beer producers experience sales decrease in Colorado

Cowen and Company's research investigated the beer market in the states where people can legally drink craft beer and smoke recreational pot. The researchers revealed that many Colorado-based beer producers faced underperformance during the period between 2014 and 2016.

Moreover, Oregon and Washington also showed a decrease in beer demand after pot retail facilities had been fully implemented.

5. Beer producers have to face new challenges

Though beer producers do not seem to be ready for the new challenges, experts think that they have enough experience and resources to change their marketing strategies and prevent future losses. The beer industry has a great opportunity to create a new approach to their customers in order to meet their changing needs.

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