USA: Legalisation of marijuana does not curb beer sales – new report

The legalisation of marijuana in several US states has not curbed beer sales, according to new research, as Americans managed to find room in their social schedules for both, the Guardian posted on January 13.

Analysts at investment firm Bernstein said fears that the brewing industry would be sent into chronic decline by red-eyed revellers reaching for joints instead of beers have proved unfounded.

“At first sight, one would regard marijuana and alcohol in general as clear rivals and that every extra dollar spent on weed meant a dollar less on booze,” they said.

But rather than swapping Budweiser for bud-smoking, the legalisation of marijuana for medical or recreational purposes has in some cases corresponded with an uptick in beer consumption.

In states where medical marijuana is legal, beer consumption was down 0.6% on average in the three years leading up to legalisation, but rose 0.1% in the three years after.

Bernstein admitted its analysis was based on a relatively small number of states over just a few years but said: “Our analysis indicates that the legalisation of medical marijuana had a positive impact on beer volume trends.”

It said this suggested “beer and weed are complements rather than substitutes”.

The picture was more mixed in states where recreational marijuana use has been legalised, but showed no signs that beer was losing out in favour of weed.

The surprising results could be down to smokers having more money in their pockets to spend on beer, thanks to a fall in the price per gram of marijuana since legalisation, said Bernstein.

In the state of Washington, habitual tokers paid around $10 per gram in March 2016, down from $25 in September 2014.

While the budding legal weed industry faces higher costs from taxes and regulation, Bernstein said retail prices had still fallen because black-market dealers require a premium to offset the risk of imprisonment.

“This would imply that previous users of marijuana now have more disposable income to spend on either more booze or more weed,” they said.

The report, put together by a team of 10 analysts, also highlighted anecdotal evidence suggesting a degree of overlap in the cultures surrounding marijuana and craft beer.

It pointed to what has become known as the “St Patrick’s Day massacre”, when police raided an event staged by the Lagunitas beer brand, at which pot-smoking was commonplace.

Lagunitas later produced a brand of beer commemorating the event, while its annual production figures still make reference to 420, a number commonly used as shorthand for marijuana culture.

Its published beer output figures for the years 2010 to 2014 all ended in the figures 420.

Fellow craft beer brand Oskar Blues even printed instructions on its cans, indicating how to turn them into a bong for smoking weed.

The brand is based in Colorado, America’s highest state (by elevation) and also one of the first two, along with Washington, to legalise marijuana for recreational use in 2012.

“One does not need to look far into popular culture to see that beer and weed cultures can be highly complementary,” said Bernstein.

The investment firm also highlighted several other industries that stood to benefit from marijuana legalisation, mainly companies likely to benefit from an onset of the munchies.

They include Domino’s Pizza, Mexican food chain Chipotle and salty snacks firm Frito Lay.

California became the first state to legalise medical marijuana in 1996, but a wave of states have since followed suit.

There are currently 28 states whose citizens can reach for a joint to ease their suffering and eight where its use is allowed for recreational purposes.

13 January, 2017