The legalization of recreational marijuana continues to gain momentum in the U.S. as more and more people embrace the idea of regulation instead of punishment for pot possession. Now, the growing popularity of the mind-numbing weed is generating additional buzz with another group of consumers – beer drinkers.
After surveying 40,000 Americans, research firm Cannabiz Consumer Group found 27 percent of beer consumers are switching their recreational drug habits from buying a cold one to rolling a legal marijuana joint instead. Many of the surveyed beer drinkers in states where cannabis remains unlawful also indicated they are likely to swap beer for weed once it becomes legally offered.
Over 24 million Americans used marijuana last year. Unless the current administration led by President Trump successfully dampers cannabis state laws, Cannabiz expects this number to increase as marijuana legalization continues to grow nationwide.
With more beer consumers smoking legal weed instead of drinking a brewski, the beer industry is likely going to notice a reduction in their bottom line. Cannabiz estimates beer sales will fall by at least $2 billion as legal marijuana pinches seven percent of the beer industry’s market. The legal cannabis industry is expected to reach $50 billion once it develops and reaches its peak, according to the research firm.
Often new products only reach “novelty” status, meaning consumers will try them because they are new. However, once the newness wears off, sales of the products drop off as consumers lose interest and never re-purchase. This novelty effect makes early market predictions of a product notoriously inaccurate, skewing the numbers and creating a false picture of future sales growth.
However, legalized weed isn’t feeling the novelty impact as consumers have shown to buy repeatedly after trying cannabis for the first time. Typically, the repeat buys are not just for the infamous euphoria created by smoking the plant, but also for the pain management and other potential health benefits of using legal marijuana. Consumers want more than just getting high, they want to feel better overall without traditional, addictive opioid painkillers. Additionally, other natural supplements like Kratom are gaining popularity as alternatives for pain management.
Recent statistics show that beer sales are already falling in states with marijuana legalization laws. Specifically, Colorado, Oregon, and Washington state, where recreational marijuana is legal, have seen the retail beer market decline over the last few years.
“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,” according to research company Cowen & Company, as cited by Time.
Large brewing companies like Anheuser Busch-InBev have been the most affected. Sales of both Coors Light and Bud Light have dropped four percent, while cheaper brews like Budweiser fell over two percent. Craft beers were equally impacted by marijuana legalization, per the research firm’s analysis.
Beer drinkers choosing to buy marijuana instead of alcohol was most noticeable in Denver, Colorado, with sales of the intoxicating beverage plummeting six percent. The shift from beer to weed was conspicuous among one particular age group, 18- to 25-year olds. Many in this demographic see weed as a safer, healthier alternative for getting a buzz.
In the end, the beer industry will survive. The industry has the money, knowledge, and resources to create marketing strategies to offset future losses from marijuana legalization. While some retail beer sales will be lost to weed, alcohol businesses have the opportunity to re-invent the industry to appeal to the changing needs of its customers.
Currently more than half of the U.S. has access to legal weed in some form, either medically, recreationally, or both. With nationwide weed legislation a certain possibility, choices for beer drinkers to get buzzed will expand beyond the typical ale, forcing the alcohol industry to make changes to decades-old selling principles.
[Featured Image by David McNew/Getty Images]