Alcohol Industry Finally Addresses The Possible Effects Of Legal Weed

Many beer companies are worried that legal cannabis might hurt their sales. And a report published last month added fuel to the fire by claiming that legal cannabis in Colorado, Washington, and Oregon was damaging beer sales. But a new report published this week reached some different conclusions. According to this new report, there may not be any reason to think that legal marijuana will hurt the beer industry.

The Details

Brewers Association Says Legal Weed Isn't Hurting Beer Industry
Brewers Association

The report was written by Bart Watson and was published by the Brewers Association. In the paper, Watson took a look at some of the stats surrounding both the cannabis industry and the beer industry.

Here’s what he concluded: “Although I don’t purport to know what the long-term effects of marijuana legalization will be, I can say that I see no evidence that legalization has had an effect on beer sales in the short term.”

According to Watson’s report, there’s no real reason to automatically assume that legal pot equals less beer. But this is exactly what most people think might happen.

The belief that cannabis will harm beer sales is called “substitution effect.” But Watson said that the data doesn’t back up the claim that people will substitute cannabis for beer.

“I’m not convinced that anyone has clearly demonstrated what the causal mechanism would be for marijuana legalization decreasing beer sales. The usual explanation provided is called ‘substitution effect,'” he wrote. “I haven’t seen any data that proves this one way or the other.”

In the end, Watson said there just isn’t enough data to make any solid predictions. He said that legal pot could eventually hurt the beer industry.

But since he hasn’t seen any evidence of this, he’s not willing to make that conclusion. At least not yet.

A Different Perspective

Brewers Association Says Legal Weed Isn't Hurting Beer Industry
Green Rush Daily

Watson’s paper comes on the heels of last month’s report about the legal cannabis industry and beer. That one was published by market analysts at Cowen and Company.

In their paper, they concluded that beer sales were dropping in Colorado, Washington, and Oregon. Those are all states where cannabis has been legalized.

The report suggested that this might not be a coincidence. In fact, it ultimately claimed that legal pot played a key role in the “underperformance of beer” in those states.

But Watson’s paper pointed out some possible problems with this study. He said that Cowen and Company might not have looked at the full picture.

Watson wrote that while Cowen and Company focused on mainstream beer sales, they forgot about other ways that beer is sold. He also said that there are a lot of demographic factors that weren’t considered in the original study.

All of this, he said, could have led to inaccurate conclusions. In the end, Watson wrote that we have to wait and see how things play out.

The Final Hit: Alcohol vs. Cannabis

Brewers Association Says Legal Weed Isn't Hurting Beer Industry
Green Rush Daily

One of the big questions about legalizing cannabis is how it will affect other industries. And alcohol has been one of the industries most concerned.

In fact, the alcohol industry has been so worried that legal pot would decrease alcohol sales that they’ve worked hard to keep cannabis illegal. This past fall, a number of alcohol companies donated money to anti-pot campaigns. But Watson’s paper could change all that. If he’s correct, then beer and alcohol companies might not have anything to worry about.