While Americans will always love beer, they are drinking a little less of it these days — as the marijuana industry booms. Let's look at how the marijuana industry is influencing big beer.
Beer has lost 10 percent of its market share to wine and hard liquor since 2006, and the rapid growth of the legal marijuana industry has further tapped into the profits of the country’s breweries.
In 1969, 12 percent of the U.S. population supported the legalization of marijuana at the federal level. According to a recent Gallup poll, that number has now grown to 64 percent. Despite the federal ban, medical marijuana is currently legal in 29 states (and the District of Columbia), with recreational marijuana legal in eight states (and, again, the District of Columbia). The legal cannabis industry reached $6 billion in sales last year, with sales expected to grow by 25 percent through 2020 and reach $50 billion by 2026.
So how is the beer industry responding to the news that more and more people are looking to get a buzz elsewhere?
Business Insider calls legalized pot “is the new craft beer,” and just as the beer industry giants have made it a habit of buying up small, popular breweries, they’ve now set their sights on getting into the cannabis market.
As craft beer sales exploded from just under 10 million barrels in 2009 to nearly 25 million barrels in 2015, sales of big brands like Budweiser and Corona saw their sales drop off. In response, the companies who produced iconic brands started investing in craft beer. The same is now happening in the cannabis space.
A few months ago, Heineken began test marketing a marijuana-infused craft beer brand in California. More recently, Constellation Brands — the third-largest beer company in the country — acquired a 9.9% share in Canopy Growth, one of the biggest companies in the legal weed industry.
Chris Burgrave, former marketing chief for Budweiser, is also shifting his attention from beer to pot. Burgrave co-founded Toast, which markets dosed, pre-rolled joints, and has also joined the advisory board of GreenRush Group, a San Francisco-based startup, which says its goal is to become the Amazon of weed.
“The same way that craft beer started and, for the longest time, was ignored and then exploded, there’s no reason why the same thing wouldn’t happen in this space,” Burgrave told Bloomberg. “There will be part supplementing and part complementing. The jury is out on how and where that will happen.”
According to a new report from Cannabiz Consumer Group (C2G), 27 percent of beer drinkers say they have already swapped cannabis for beer or would do so if pot was legal in their state. With lots of states yet to join the legal ranks, there is plenty of room for growth for the marijuana industry and (possibly) plenty to worry about for big beer.