A new study by investment banking firm Cowen and Company suggests that beer sales are declining in markets where recreational cannabis is legal. This contradicts earlier reports which did not show such a correlation.
Vivien Azer, Cowen and Company’s managing director and senior research analyst specializing in the beverage, tobacco and cannabis sectors, reviewed recent Nielsen data in three U.S. states where recreational cannabis use has been legalized and compared it to the rest of the United States. The data showed that in Colorado, Oregon and Washington beer sales have “collectively underperformed” in the last two years. While “U.S. government data for the states of CO, WA and OR all show consistent growth in cannabis incidence among 18-25 year olds, (this is) coupled with declines in alcohol incidence”.
The biggest drop is on premium domestic beers (-4.4%) followed by mainstream beers (-2.4%). Craft beer sales are affected to a lesser extent with a slower growth compared to other markets. The deceleration is consistent with the rest of the U.S. but the three reviewed states underperform the entire U.S. craft beer market by 950 basis points. Only imports appear not to be affected.