Cannabis sales continue to rise and put pressure on alcohol consumption
For years, cannabis has been standing in the way of alcohol’s popularity. In fact, a 2018 study by scientists at the University of Connecticut and the Andrew Young School of Policy Studies in Atlanta found that the legalization of medical cannabis in several states has lowered alcohol sales by 15%. This trend appears to remain stable as different Cowen analysts have charted the impact of legal marijuana on the sale of alcoholic beverages such as wine, beer, and whiskey.
The results speak to the potential spillover effects of marijuana laws on the use of other substances that could contribute to negative health and social outcomes, as the relationship between these substances is a major public health issue. For this year, it has been evidenced that marijuana sales in the US have been able to surpass sales of alcoholic beverages. This, according to Vivien Azer, an analyst at Cowen Equity Research, does not mean that the alcohol business will be paralyzed.
By the time this year ends, experts forecast $26 billion in cannabis sales, making it clear that cannabis continues to gain ground. The business now accounts for 10% of the size of the alcohol market, up from the 2% it experienced in 2017. The report also makes clear that alcohol sales growth is underperforming marijuana by 0.6% to 1.1% in states where cannabis is legal.
“Cannabis should gain [four times] the number of consumers as alcohol [will gain] over the next five years … as younger consumers also take longer breaks from alcohol,” Azer said. Analysts at this firm continue to bet on Green Thumb Industries when it comes to the cannabis industry, along with its outperform rating for the company.