With some form of either retail or medical marijuana now legal in 28 states, market watchers are beginning to question what kind of impact the new green revolution will have on related markets. With alcohol representing the legal intoxicant of choice for most Americans, some trend forecasters are anticipating that consumers might look to substitute newly legal options for the old school tried and true. One new industry report suggests that marijuana legalization might particularly hurt beer sales.
A report from Forbes magazine – a surprisingly consistent player in the cannabis news space – highlights a study by the Cannabiz Consumer Group. The study looks at marijuana and alcohol markets. The group found that 27% of respondents reported that they had either already substituted cannabis for beer or would do so if cannabis became legal in their state. The study estimates that the beer industry could lose up to $2 billion in sales as users shift to cannabis. To put this in perspective, the National Brewers’ Association reports that annual beer sales reach just over $100 billion nationally. A loss of nearly 2% would represent a significant hit to the bottom line of American brewers.
With men and high income groups already seeing declining alcohol use in America, we may see more substitution in the future. These same groups that are leaving alcohol are already heavily represented in marijuana markets. What’s more evidence suggests that marijuana, when readily available, is a common substitute for more dangerous substances. An increase in opiate overdoses in states with legal medical marijuana suggests that marijuana serves as a substitute for opiates in some cases. Likewise, a fall in traffic fatalities in states that legalize marijuana suggests that some drinkers are now choosing to smoke instead, or at least to stay home instead of driving home from the bar. We wonder how long it will take before Budweiser hops into the marijuana market.