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National Beer Sales Decline as More States Legalize Marijuana

Beer Cannabis

The beer industry experienced a decline in sales in 2018 as more states legalized marijuana. Vivien Azer of Cowen said that 2018 was the “worst year for beer sales in the near decade we have been covering the alcohol industry, and we continue to believe that growing cannabis use is a factor.”

The National Beer Wholesalers Association Purchaser’s Index was down 8 points from the previous year, Yahoo! Finance noted.

According to Cowen’s recent survey, beer still remains the most popular alcoholic beverage among those that do or have used marijuana. The survey also showed that 70% of previous marijuana users indicated that they’d reduce their alcohol consumption if they started using marijuana again.

“Hypothetically, you take a consumer that on a beer occasion would have three or four beers and then add cannabis to the mix, well now that’s one or two beers plus cannabis,” Azer said. “As we think ahead to 2019, we are increasingly cautious again on beer.”

Bobby Burleson of Canaccord agrees that alcohol sales could continue to decline with rising legalization efforts passing.

Burlseon said, “A robust adult use recreational cannabis industry is going to be competing with alcohol sales to a certain degree. There’s a psychoactive wallet share of consumer dollars. I don’t think it’s a perfect substitution, but it’s some erosion into the discretionary spending on alcohol.”

Another report from the Distilled Spirits Council that analyzed trends in Colorado, Oregon and Washington found that beer sales have declined at a consistent rate with the national average.  In Colorado and Oregon beer sales dropped 3.6% and in Washington the decline was 2.3%. The national average decline is 4%.