Molson Coors (NYSE:TAP) is the latest beer maker to sound off over the legalization of marijuana amid fears consumers will trade a cold one for legal cannabis, denting beer sales.
“Although the ultimate impact is currently unknown, the emergence of legal cannabis in certain U.S. states and Canada may result in a shift of discretionary income away from our products or a change in consumer preferences away from beer, Molson Coors said in its financial report. The Boston Beer Company (NYSE:SAM), maker of Sam Adams, has also voiced similar concerns about legalized cannabis.
Along with fears about consumers switching to weed, the beer industry is also facing more increased competition from other beverage makers. Goldman Sachs downgraded breweries last summer, citing lowered demand for beer as consumers shift to wine. Data from the Brewers Association showed that in 2016, beer volume sales were flat.
Another major beer maker, Constellation Brands (NYSE:STZ), maker of Corona and Modelo beers among others, is taking a proactive approach to rising competition. The company took a stake in medical cannabis company Canopy Growth last October.
CEO Rob Sands described the investment as part of its plans to identify "early stage consumer trends."