Legalized Marijuana Is Hurting Alcohol Sales

In states that have legalized marijuana use, alcohol sales are trending downward.

In states where recreational marijuana use has been legalized, alcohol companies are seeing a drop in sales. Many consumers in these states are using marijuana rather than alcohol.

According to a report in Brewbound, alcohol sales have seen a marked decrease in sales in states where cannabis use is legal. This trend has gotten worse in 2016.

With more and more states legalizing marijuana for medical and recreational use, it’s expected that alcohol sales will continue its downward trend. This trend is impacting both major breweries and craft breweries.


Who Is Being Affected?

Consumers are spending money on marijuana at a similar rate to alcohol in Colorado, Washington, and Oregon. This is negatively impacting the sales of major breweries as well as craft brewers.

Miller Coors has experienced a drop of 4.4 percent in the sales of Coors Light over the past two years in these states. Anheuser Busch has experienced a similar loss in sales in Bud Light. This underperformance has been attributed to the legalized sale of marijuana.

According to Viven Azer of Cowen and Company, a prominent financial services firm,

“This is perhaps not surprising, given that U.S. government data for the states of CO, WA and OR all show consistent growth in cannabis incidence among 18-25 year olds, coupled with declines in alcohol incidence.”

This increased use of cannabis shows that more people are preferring cannabis to alcohol. The average adult spends about $645 on marijuana each year.

The legalization of marijuana is becoming a trend as more states are evaluating their laws against marijuana use. On Election Day, medical marijuana was legalized in Florida with 71% support. Arkansas and North Dakota also legalized medical marijuana.

In California, Nevada, Massachusetts, and Maine, measures to legalize marijuana for recreational use were passed. The only initiative that didn’t pass was Arizona’s.

Because of the results of the election, about 20% of Americans will have legal access to marijuana. This marks a major victory for marijuana reform activists.

While it isn’t believed that people will stop consuming alcohol, this trend doesn’t bode well for beer breweries. As the popularity for marijuana legalization continues to grow, breweries can expect to see sales drop even more.