As the movement to legalize recreational marijuana gains steam in Michigan, many craft breweries have started to take notice.
On their minds is a key concern: Would legalizing pot negatively affect sales of craft beer?
It’s a question — speculated about in states like Colorado and Washington that have legalized the recreational use of marijuana — that market experts say has no clear answer at this point based on available data.
Moreover, some West Michigan craft brewers welcome the idea, seeing a path for increased business and the potential to marry the two products and cultures.
“I don’t believe it will have any immediate profound effect on our business or industry directly, but in the long run may add to it as opposed to take from our industry,” said Seth Rivard, co-founder of Rockford Brewing Co. “In my personal experience, there is a ‘high’ correlation of crossover in the demographics between craft-beer lovers and pot lovers. If pot use does grow over time because of legalization, we’ll probably see an uptick in craft beer fans as well.”
Rivard — who supports marijuana legalization because it is “safer than alcohol, hands down” — added that Rockford Brewing “would consider a 420 happy hour with half-off munchies and dank brew! The craft beer industry is already well connected to the Mary Jane culture.”
After Michigan voters approved cannabis for medical use in 2008, advocates in recent years have launched ballot initiatives to legalize recreational use for adults. However, the question hasn’t yet made it to voters. MILegalize, which spearheaded an effort in 2015, failed to gather enough signatures in the required timeframe to make the ballot. Earlier this year, though, the group backed a similar effort now being led by the Coalition to Regulate Marijuana Like Alcohol, which said in late July it had half of the signatures it needed and had raised more than $800,000. A second ballot effort, by Abrogate Prohibition Michigan of Midland, looks to amend the state constitution to allow recreational use.
If put to voters, advocates believe Michigan is poised to join other states in legalizing recreational cannabis. A February poll by Lansing-based EPIC-MRA (commissioned by the Michigan chapter of the National Organization for the Reform of Marijuana Laws, or NORML) found 57 percent of 600 people surveyed would vote to legalize marijuana. Eight states have now legalized marijuana for recreational use.
Elsewhere, some observers have claimed that legalization has contributed to declining beer sales in those states, and that marijuana acts as a substitute for beer, though experts say there isn’t enough available data to show that.
One of the challenges in finding a correlation is that “we still don’t really know how much the cannabis market is growing given the shift from the black market to the legal market,” said Bart Watson, chief economist at the Colorado-based Brewers Association, the trade group for the independent craft beer industry.
In Colorado, beer shipments are up this year, Watson said, and “in general appear to conform to per-capita trends we see nationally.” He adds that changes in consumption also don’t tell the full story, and that population growth should be considered to look at per-capita consumption, and that other variables or changes across the alcohol industry should also be considered.
He added that there’s a “strong possibility” legalization will hit total beverage alcohol — beer, wine and spirits — in “different ways, but also different parts of the beer market, too.” For example, macro breweries like Anheuser-Busch and MillerCoors could more likely be hit than craft beer companies.
“But it’s too early to tell,” Watson said. “Anyone telling you there is a strong effect one way or another is probably jumping to conclusions.”
Long-term, though, Watson said there could be market changes with new cohorts of 21-year-old drinkers. If there are any immediate effects being seen, he added, it’s how breweries train the staff to recognize different forms of intoxication impairment.
Like Rivard, Newaygo Brewing Co. co-owner Nick Looman sees pot legalization as an economic boon, and one that can bring more revenue and population growth to communities. Looman, who serves on the boards for the City of Newaygo’s Economic Development committee and Principal Shopping District/Downtown Development Association, said the city is considering a proposal for a large marijuana growing facility there.
“As we are the only microbrewery in our rural county, our long-term growth is dependent upon population growth in our city and county,” said Looman, who also supports legalization. “Any business looking to open a new multi-million dollar production facility in the county, let alone in my city limits, will bring workers, bring demand for housing, bring additional demand for jobs … and will boost our local economy. More importantly to me, these families will bring youngsters who will increase my hiring pool. That is what I need most.”
While legalizing marijuana may affect sales of other types of alcohol, many in the craft beer sector see a cultural similarity between their products and pot, which shows in the way some craft beers are marketed. In some cases, brewers have even used non-mood-altering derivatives of the cannabis plant in making beer. Cannabis and hops are even from the same family of flowering plants.
“A casual observation is that there is a high correlation between craft beer lovers and tokers,” Rivard said. “You may see more niche-based grass-themed things happen, but it’s already common.”