What will legal weed do to the beer business? It’s an open-ended question with a bajillion dollars riding on it, and no one really knows how it’s going to shake out. The mystery has fathered some truly disjointed industry developments for the past half-decade! Macrobrewers have hedged against potential pot-induced ruin by staking strategic claims on the cannabis industry, only to watch with dismay or cut their losses entirely as federal legalization failed to materialize. Meanwhile, Canada’s biggest cannabis firm is lately staking its own claims on — wait for it — the American beer business. Meanwhile, craft breweries are future-proofing their portfolios with tetrahydrocannabinol (THC) non-alcoholic beverages where it’s legal, and experimenting with cannabidiol (CBD) alcoholic beer, which may not actually be legal anywhere, with one eye on innovation and another on preservation.
Brewers and their cannabis counterparts are moving in fits and starts like this because even though their respective wares are deeply popular, precious little reliable data exist to show how the products interact together in a legal marketplace, and how that marketplace will take shape. With federal legalization still a pipe dream in the United States, solid information streams with national scope — like scan data and tax-paid estimates in the beer industry, for example — are harder to come by and contextualize in the nascent, patchwork United States cannabis business. But as efforts to reclassify cannabis for recreational use play out on a state-by-state basis, new data are emerging about how marijuana products and beverage alcohol go together. Good news for apprehensive brewers big and small: A recent study from researchers at the University of Pittsburgh’s School of Public Health has found that they do, indeed, go together. Sort of. It’s complicated.
“What we broadly found was that there was an increase in overall drinking among the population in the states that implemented recreational cannabis laws,” Coleman Drake, Ph.D., an assistant professor in Pitt’s health policy and management department tells Hop Take. Using data from the Centers for Disease Control and Prevention’s Behavioral Risk Factor Surveillance System, Drake and his co-authors compared alcohol and cannabis use in states that implemented recreational cannabis laws to those that didn’t during the survey’s 10-year span, and also compared alcohol use before and after implementation within the states that legalized cannabis. They published their findings in November 2022 in JAMA Health Forum. In basic economic terms, the study found a complementary relationship between alcohol and weed, not a substitutive one that some brewers have been bracing for. “When people consume more peanut butter, they probably consume more jelly,” says Drake. And according to his research, the same holds for recreational cannabis and alcohol.
How much more? The increases were modest: a 1.2 percent overall increase in people reporting they’d drank “any alcohol in the past month” for the first year after states’ cannabis legalization moves, followed by slight decreases in the next two years. Drake and his co-authors saw no discernible increase in overall binge-drinking behavior following legalization, and found that increases tended to be higher among younger survey respondents and men (2.7-4.5 percent) than the average. Men also reported slight increases in binge-drinking behavior in the first year of cannabis legalization, but that didn’t bear out in the years that followed. “I didn’t interpret that as a red flag,” Drake says.
The idea that alcohol and cannabis are complementary vices may seem like common sense to anybody who’s passed through the halls of American higher education (or a music festival, or the East Village on a Tuesday afternoon), but that’s actually not what the CDC’s data indicate. “The results were of greater magnitude and significance for people that actually were not in college posts than those that were,” Drake says. “It’s an interesting dovetail with the finding that there were these increases [in drinking after legalization] amongst younger people, suggesting that, ‘No, this isn’t a college thing.’”
That sort of counterintuitive finding is just one reason among many that the relationship between recreational weed and beer demands more scientific study. Another: The Pitt study did not break out beer from wine, spirits, and other hard drinks. So nothing Drake and his colleagues found is direct statistical relief for brewers anxious about legalization. Drake is also quick to point out that another recent study from Canadian researchers indirectly contradicts his conclusions. That study, published this month in the journal Health Policy, found that the average alcohol sales in the country from 2017 to 2018 were actually 1.8 percent lower than they would’ve been in the absence of legal medical cannabis. The Pitt study tracked self-reported consumption, not sales, and recreational cannabis, not medical.
Do those distinctions account for the discrepancy? Or is it differences in Canadian and American drinking cultures, or weed cultures, or public health systems? Or is it some nuance in state-level data collection or implementation practices? “The problem is, it could be all the above,” says Drake. “We need more research to distinguish between which of those things it is.”
On balance, though, the relatively small variances the studies found suggest that American brewers should be mindful, but not dreadful, of the state-by-state march toward recreational cannabis. Legal weed products may not be a major boon for beer producers, but they aren’t shaping up to be an existential threat, either — at least for the time being. “We just don’t know that much about how this is gonna play out long-term, so I understand” why brewers might be wary of recreational weed, says Drake. “But I think from what we’ve seen so far, if I was a brewer, would I be that worried about this? Probably not.”
🤯 Hop-ocalypse Now
The first Super Bowl of the post-exclusivity era is in the books, and boy did once-mighty beer marketers biff it. With three whole minutes of national air, Anheuser-Busch InBev earned only a single slot on USAToday’s 35th-annual postgame Ad Meter: Its Bud Light commercial with husband-and-wife actors Miles Teller and Keleigh Sperry Teller came in sixth overall in the marketing benchmark survey. And that’s it! Michelob Ultra’s ultra-clunky Netflix collab got skunked, Heineken 0.0’s odd “Ant-Man” tie-in got squashed, and Molson Coors’ very contrived, very predictable High Stakes Beer Ad came up empty-handed — dubious DraftKings partnership notwithstanding. Not a single one of ‘em memorable, either! Hardly a tour de force performance from an industry fighting for share-of-throat with the emboldened spirits sector. Better luck next year, all.
📈 Ups…
Beer segment is up 7 percent in dollars year-over-year despite craft’s struggles… Athletic Brewing Co. is valued at $500 million these days, sheesh… Down a smidge compared to 2019 after steering its 40-percent draft business through the pandemic, New Glarus Brewing Company sees “promising” year ahead… Longtime Brooklyn Brewery honcho Garret Oliver partnered with Pinhook on a bourbon to raise dough for the Michael James Jackson Foundation…
📉 …and downs
The Bureau of Labor says beer-at-home prices are up 8.6 percent compared to January 2022… That viral World Cup photo of all the banned Budweiser supposedly stuck in a Qatari warehouse was staged, shocker… Speaking of Bud, PETA accuses the brand of “mutilat[ing]” its iconic Clydesdales for cosmetic reasons… Constellation Brands cannabis investment, Canopy Growth, to fire 60 percent of workforce… Are struggling beer sales a symptom of a haves/have-nots economy? In these United States?! Say it ain’t so… Per the Distilled Spirits Council of the United States, liquor overtook beer on dollars in 2022… Virginia lawmakers put forth bills to regulate placement of Hard Mtn. Dew and other soft-to-hard crossovers…
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