A multinational investment bank says that marijuana has become a \u201cformidable competitor\u201d to alcohol, projecting that nearly 20 million more people will regularly consume cannabis over the next five years as booze loses a couple million drinkers. It also says marijuana sales are estimated to reach $37 billion in 2027 as more state markets come online.<\/p>\n
An analysis from the firm TD Cowen says marijuana sales reached $29 billion in 2023, which is approximately 11 percent of what the alcohol industry brought it. That\u2019s up from four percent just five years ago, and marijuana is expected to grow by another seven percent annually over the next five years.<\/p>\n
\u201cAs such, we believe that over the next 5 years, the cannabis category will add 18 million past-month consumers, while alcohol will lose 2 million past-month consumers, as consumers increasingly embrace cannabis and temper their alcohol consumption,\u201d the report, titled \u201cCannabis Beats Booze,\u201d says.<\/p>\n
Vivien Azer, team lead on the analysis, told Marijuana Moment that the report bolsters a growing body of market research.<\/p>\n
\u201cWe\u2019ve been calling for seven years now for cannabis to increasingly prove as a dislocator to alcohol sales\u2014and, really, it\u2019s just a matter of time,\u201d she said.\u00a0However, she said it was \u201ca little surprising\u201d to see data projecting an even greater underperformance for alcohol sales in legal marijuana states.<\/p>\n
While marijuana sales are still just a fraction of the dominant alcohol market, analysts say that there\u2019s reason to believe that booze could be \u201cat risk\u201d of declining because of increased substitution among consumers, particularly young people. The TD Cowen report cited a proprietary survey that found more than two-thirds of cannabis users report reducing alcohol consumption.<\/p>\n
\u201cIn turn, we are seeing divergent revenue growth trends in states where consumers have access to legal cannabis,\u201d it said, noting that Bureau of Economic Analysis (BEA) data shows alcohol is \u201cunderperforming\u201d in legal marijuana states relative to prohibitionist states.<\/p>\n
Evolving state marijuana markets, as well as yet-to-be-implemented laws in states that recently legalized such as Minnesota and Ohio, will bring in an estimated $37 billion in sales in 2027, the report says.<\/p>\n
It adds that, in the short-term, it doesn\u2019t seem that alcohol companies will have difficulty navigating the shifting consumer trends, which also involve mostly younger people generally reducing their alcohol intake. But in the medium- and long-term, certain brands may face competitive challenges.<\/p>\n
\u201cAlcohol will continue to underperform in legal cannabis states,\u201d the firm said, adding that beer sales are most at-risk according to its analysis. The average number of drinks that people have in a given occasion \u201cis lower in cannabis states, which\u00a0we believe is partially attributable to the impact cannabis has had on alcohol consumption.\u201d<\/p>\n
While there\u2019s been reporting about the alcohol industry\u2019s interest in potentially entering the marijuana market, Azer said that she doesn\u2019t anticipate a significant movement until there\u2019s some \u201clegislative or administrative\u201d regulatory change at the federal level.<\/p>\n
While the report focuses on U.S. trends amid the state legalization movement, TD Cowen also looked at Canada, which legalized marijuana at the national level in 2018, as a \u201cuseful case study.\u201d It found that Canadian cannabis sales are now 20 percent the size of the alcohol market.<\/p>\n
Several of the report\u2019s findings are supported by separate research, including a study published last month that found marijuana legalization may be linked to a \u201csubstitution effect,\u201d<\/a> with young adults in California \u201csignificantly\u201d reducing their use of alcohol and cigarettes after the cannabis reform was enacted.<\/p>\n Data from a Gallup survey published in August also found that Americans consider marijuana to be less harmful than alcohol, cigarettes, vapes and other tobacco products<\/a>.<\/p>\n A separate survey released by the American Psychiatric Association (APA) and Morning Consult in June also found that Americans consider\u00a0marijuana to be significantly less dangerous than cigarettes, alcohol and opioids<\/a>\u2014and they say cannabis is less addictive than each of those substances, as well as technology.<\/p>\n Last year, a survey showed that Americans believe that\u00a0cannabis is less dangerous than alcohol or tobacco<\/a>.<\/p>\n State-level market data also reinforces TD Cowen\u2019s analysis. For instance, Michigan marijuana sales outpaced purchases of beer, wine and liquor combined<\/a> during the most recent fiscal year, according to a new report from the legislature\u2019s nonpartisan House Fiscal Agency.<\/p>\n Also during the last fiscal year in Illinois, legal cannabis brought in $451.9 million\u2014about $135.6 million more than alcohol<\/a>.<\/p>\n Colorado last year state generated\u00a0more income from marijuana than alcohol or cigarettes<\/a>\u2014and nearly as much as alcohol and tobacco combined. Similar milestones have been seen in\u00a0Arizona<\/a>\u00a0and\u00a0Washington State<\/a>.<\/p>\n Italian Marijuana Activists Have Already Collected Nearly Half The Signatures Needed To Put Legalization Measure Before Parliament<\/a><\/p>\n<\/blockquote>\n The post Marijuana Will Gain Millions Of Consumers Over Alcohol, With Sales Hitting $37 Billion By 2027, Investment Bank Projects<\/a> appeared first on Marijuana Moment<\/a>.<\/p>\n
A multinational investment bank says that marijuana has become a \u201cformidable competitor\u201d to alcohol, projecting that nearly 20 million more people will regularly consume cannabis over the next five years as booze loses a couple million drinkers. It also says marijuana sales are estimated to reach $37 billion in 2027Continue Reading<\/a><\/span><\/p>\n","protected":false},"author":458,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1335,18],"tags":[],"_links":{"self":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/71103"}],"collection":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/users\/458"}],"replies":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/comments?post=71103"}],"version-history":[{"count":1,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/71103\/revisions"}],"predecessor-version":[{"id":71104,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/71103\/revisions\/71104"}],"wp:attachment":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/media?parent=71103"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/categories?post=71103"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/tags?post=71103"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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