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Is there any evidence that marijuana is dragging down craft beer sales? Um, no

December 14, 2016Chris Crowell

marijuana craft beer sales

Well, it had been a few months, so it must be time for every media outlet to call up someone, get a fresh quote and recycle their “is marijuana cutting in to craft beer sales?” article that they keep posting. And hey, who are we to miss all the fun?

This recent cycle was kicked off by an analysis by Cowen and Company that used Nielsen data that showed “total beer volumes in that market have fallen 6.4 percent year-to-date and craft beer volumes have dipped five percent.” These numbers outpaced the general declines across the country.

Well, that proves everything. Case closed.

Surprisingly, that might be too simplistic of an argument. First off, if the CBB Christmas party last weekend was any indication, weed and beer are most definitely not enemies. But secondly, can you really pull out this smoking gun data point from a sea of data points to argue this when the entire beer industry has been trending down for several years? We aren’t good at math or science, but feels like more dots need to be connected here.

Anyway, before we keep recklessly speculating too, lets move into what smarter people had to say. Usually that is Bart Watson, chief economist of the Brewers Association. Working inside the BA may mean Bart is bias too (and maybe that’s true to an extent), but we always find his arguments and chosen data to be the most well reasoned when a round of craft beer sales arguments pop up.

Take it, Bart:

More generally, even pointing to a change in consumption isn’t enough to prove anything, since there are a ton of confounds in trying to figure out whether beer consumption is increasing or decreasing and why. The first would be to look at population growth, since per capita consumption is going to tell us more about long term trends than absolute consumption in any given year.

Next would be to look at other factors that affect the beer industry, such as unemployment, other parts of beverage alcohol, etc. Many of the analyses I’ve seen ignore these other variables and simply look at sales in a place before and after a change in marijuana regulation. Although that may tell part of the story, doing these types of comparisons without controls makes it very easy to confuse noise for signals.

He makes a ton of great points as to why there is more smoke here (tee hee!) than fire. Read his whole assessment, but we feel this is the main point likely underlying any article that has been and will be written on this topic in the coming years:

I’m not convinced that anyone has clearly demonstrated what the causal mechanism would be for marijuana legalization decreasing beer sales.

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