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Beer Stocks Are Falling Fast Because Millennials Prefer Weed

beer stocks are falling fast because millennials prefer weed


Beer Stocks Are Falling Fast Because Millennials Prefer Weed

Does the downgrade in beer company stocks indicate an uptick in investments for the cannabis industry? Better yet, does this mean Millennials prefer weed over booze?

Beer is out and weed is in! According to a recent report by analysts at Goldman Sachs, a decline in the stock market for companies such as Coors and Corona might possibly correspond with predicted upticks for stocks in the cannabis industry. It’s official: Millennials prefer weed over beer.

Unfortunately, the report is bad news for beer strongholds like Constellation Brands and the Boston Brewing Company: the multinational banking and financial corporation officially downgraded them earlier this week.

Overall, the study seems to show one thing, according to an analyst involved in the report: Millennials are “shifting away from beer.” And that means that they’re shifting towards weed.

Beer Consumption Down, Weed Consumption Up beer stocks are falling fast because millennials prefer weed

So what’s going on, exactly?

“We expected a cyclical rebound in total alcohol consumption post-recession,” chief analyst Freda Zhuo wrote in a note first obtained by CNBC. The Goldman Sachs report, which tracked trends using statistics from 2016, found that “the cause is younger groups shifting away from beer.” To summarize: the most direct correlation Goldman garnered from their data set was that as beer sales declined, wine sales increased. Math, right?

The New York Post succinctly summarized the stats:

Constellation’s 12-month share price target was cut to $210 by Goldman. Boston Beer, the maker of Sam Adams, saw its shares fall 5 percent, to $130.50, while Constellation Brands, the maker of Corona, slipped 1.3 percent, to $196.00. Goldman lowered its 12-month price target for Boston Beer, to $110 from $140 — 15 percent below Monday’s close.

So where exactly is weed in the midst of things?

Final Hit: Millennials Prefer Weed Over Beer

beer stocks are falling fast because millennials prefer weed

The answer can be found in the burgeoning cannabis trade, thanks to the legalization movement. Considering that Millennials are smoking weed more than ever before, this particular intersectional causality isn’t that much of a surprise to us—especially when paired with projections that the cannabis industry will be worth roughly $50 billion in less than ten years.

If you’re wondering where the data to support this claim is, look no further than Investopedia. According to the site, four bonafide weed stocks have made it into the mainstream market. Our advice? Millennials prefer weed. Take your investments out of beer and into cannabis: the numbers don’t lie.

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