Are Soaring Cannabis Sales Hurting the Beer Industry?

[dropcap class=”kp-dropcap”]C[/dropcap]owen & Company senior research analyst Vivien Azer released a report on Jan. 8 linking falling beer sales with the rise of the ever-expanding cannabis market. On the other hand, other reports indicate that liquor sales haven’t been affected in legal cannabis states. Beer, however, appears to be taking the brunt of cultural change due to the shift from alcohol to cannabis.

Some research has found that 2018 was a record low for beer sales, due to people making the switch from alcohol to a healthier substitute. Azer adjusted her original projection for the cannabis market in 2030 from $75 billion to $80 billion. So far, it appears the trend will persist into 2019 and beyond.

“As we look ahead to 2019, with more medical and adult use cannabis markets coming online (e.g., Massachusetts, Ohio West Virginia, North Dakota among others), we would expect another challenged year for beer, driven by cannabis substitution,” Azer told Forbes.

With the passage of the latest Farm Bill, excitement over the cannabis and hemp industries is at an all-time high. The legalization of recreational cannabis, of course, is also a major factor in the shift of the cannabis and beer markets.

In addition, a growing number of beer companies are investigating the cannabis market. The change in American culture is forcing the companies to adapt. Companies like High Style Brewing lauched Pale Haze, a non-alcoholic, cannabis-infused beer. Corona and Modelo beer maker Constellation Brands invested $4 billion into cannabis producer Canopy Growth last August. Blue Moon beer maker Keith Villa also launched three non-alcoholic, cannabis-infused drinks.

“Our increased confidence reflects the bigger than expected increases that we continue to see for reported cannabis incidence among adults,” Azer stated in a memo. Azer focuses her research on the cannabis, tobacco and alcohol beverage industries.

The rollout of cannabis regulations spells a rocky transition into a regulated market, but it hasn’t slowed the rising popularity of cannabis as a recreational inebriant.