There have been some reports in recent weeks which suggest that marijuana legalization is creating some drag on beer sales in states like Colorado, Washington, and Oregon (and there have also been reports arguing the opposite). 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.
Let’s delve into the (scant) existing evidence and why I differ on this issue from some other analysts.
Dissecting the Data
First, I think there are data issues with some of the analyses. For example, a recent analysis by Cowen and Company used Nielsen data to note that in Denver, “total beer volumes in that market have fallen 6.4 percent year-to-date and craft beer volumes have dipped five percent.” Now, I think Nielsen data is great, and I don’t doubt that in the channels they measure those numbers have some validity, but the problem is that Denver is probably one of the markets where scan/POS misses the most volume given the incredibly strong craft on-premise scene.