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Dec 7, 2016 12:05 PM

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.

Cowen and Company have provided information on the beverage, cannabis, and tobacco markets. The firm's researchers found that beer markets had shown a below-trend economic growth in the past two years. A significant decrease in sales is experienced by the beer markets in states with legal recreational cannabis. The sales rates of beer producers have dropped more than 2% there this year comparing to the rest of the U.S.

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The Cowen specialists explained the beer sales decrease with the intensive growth of cannabis retail sales that became open to consumers at different points of time. While these three states are implementing the retail infrastructure for weed users, local beer producers are suffering from sales drops.

The producers of mainstream beer incur the biggest losses. While economy beer businesses are facing a 2.4% decrease in sales, the sales rates of premium beer companies are dropping by more than 4%. The researchers are not surprised by these numbers, as the official statistics for Colorado, Oregon, and Washington show a steady increase in marijuana consumption among residents aged 18-25 years old in contrast to the alcohol decline among this group of consumers.

Massachusetts Voters Approved Recreational Marijuana Initiative
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Massachusetts has now become the first state in the eastern part of the country to legally permit adult use of cannabis. After the Tuesday’s approval, the state, together with California, Maine, and Nevada, has joined Alaska, Colorado, Oregon, and Washington that currently use marijuana recreationally.

However, the producers of craft beer are still seeing an increase in sales in Washington and Oregon despite the overall negative tendency. Only in Colorado, the demand for the drink is seeing a drastic drop. Craft beer sales in Denver, Colorado, are experiencing a 6.4% reduction year-to-date. Though the overall decrease of craft beer use has been observed across the country, only the decline in high-quality beer sales relates to states with recreational weed.

Meanwhile, the sales of imported beer seem not to be affected by legal marijuana. Since more states have legalized the adult use of cannabis this year, it is unknown whether domestic mainstream beer producers will manage to meet the new market challenges.

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Recreational marijuana in now legal in California. Voters have approved Proposition 64, making California the most populous state in the United States to legalize the recreational use of marijuana.