Deep-pocketed beer industry stakeholders across the country are terrified of marijuana. Per a report from The Intercept, distributor groups in Massachusetts and Arizona have been pouring tens of thousands of dollars into the war chests of organizations opposing legalization. Meanwhile, Boston Beer Co., the nation’s second largest craft brewery, ominously warned in its 10-K filing that legal weed could “adversely impact the demand for beer.”
WHY IT MATTERS
There are five states that have marijuana legalization ballot measures up for vote this November. Massachusetts is one. There, the Beer Distributors PAC, a group representing 16 beer wholesalers across the Commonwealth, gave $25,000 to the anti-reform group, Campaign for a Safe & Healthy Massachusetts. With support from the Republican governor and Democrat mayor of Boston alike, Safe and Healthy Mass. has fairly successfully pitched weed to the public as an issue of public safety. Of course, the paramount concern for distributors, as well as Boston Beer and very hopefully any alcohol industry stakeholder who has looked in a mirror before, isn’t public safety. It’s losing market share.
What’s interesting about this, though, is that the very few case studies we have to look at seem to indicate those fears may be unwarranted. In fact, in the words of a liquor store owner in Colorado, which was the first state to legalize the drug for recreational use, “If anything, it’s kind of helped us. A high tide lifts all boats.” The same Guardian article from which that quote is pulled continues: “Tax records show that alcohol sales have continued to grow in Colorado despite the rapid rise of recreational marijuana. Even as tax revenues from marijuana nearly tripled between June 2014 through May 2015, alcohol sales continued to steadily increase as well.”
And with regards to beer, you couldn’t dream of a more ideal marketplace than Colorado's to dispel these concerns. Just two weeks ago, The Denver Post reported that the state’s craft beer industry boasted an economic impact of $1.7 billion in 2015, representative of 48% growth year over year. There are more than 350 breweries there already, and more on the way. All this, of course, from one of the greatest beer states in the country.
There are a couple problems here, though. Pot is only legal for recreational use in four states and Washington, D.C., giving us a very small sample size to go off of. And of those four states, three are established already as craft beer meccas (Colorado, Oregon, and Washington). So while pot hasn't cut into booze there, it's not overly surprising, given the landscape. So we'll concede that it'll be interesting to see how this plays out in states playing a bit of catch up on craft (like Arizona). That’s fair. But it would also be fair to examine the laws regulating beer in those states, many of which date back to Prohibition, before putting the crosshairs on pot. Do that, then ask which is a bigger threat to beer.
Alcohol Industry Bankrolls Fight Against Legal Pot in Battle of the Buzz [The Intercept]