Cannabis Is Competing With Alcohol Industry, Studies Indicate
Move over alcohol, the latest reports show adults preferring legal cannabis to wine, beer and liquor.
As more adults gain access to legal cannabis fewer of them choose booze. Is the cannabis industry gearing up to take a bite out of the alcohol market?
In a budding cannabis industry, are millennials ditching the hangover for fresh flowers?
This article takes a look at several recent industry studies and reports that break down how cannabis is alcohols newest competition.
Distilled Spirits Council Analysis
In January 2019, the Distilled Spirits Council produced a report analyzing the impact of retail marijuana on alcohol sales in the three states with the longest history of legalized recreational marijuana sales.
According to the report, beer sales in the three states have been declining since legalization, while wine sales have been mixed, going up in some states and down in others.
The authors of the study say this is consistent with a national long-term trend in alcohol sales, yet they point out that liquor (spirits) sales have increased since legalization.
However, one year before this, a joint study between the University of Connecticut, Universidad del Pacifico (Lima, Peru), and Georgia State University presented results showing an almost 15% reduction in monthly alcohol sales in counties located in medical marijuana states.
The research included nearly a decade (2006-2015) of sales data, from Nielson Retail Scanner, including 90 alcohol chain stores such as groceries, liquor stores, wholesalers, and others.
Cowen & Co., New Cannabis vs. Alcohol Report
Now, a new report by Cowen & Co. anticipates cannabis sales will soar to approximately $75 billion over the next decade, with a big chunk of those sales to be taken out of the beer industry.
The report is based on an analysis of new national and state data from the CDC and suggests that in states where cannabis is legalized, we can expect to see less alcohol use, and even reduced opioid consumption.
According to the latest analysis, states for which adult-use cannabis is available already had binge-drinking intensity rates fall 9% below the national average and 11% below non-cannabis states.
Also expect newly added legal cannabis states to rise to meet the trend of less alcohol consumption and more cannabis use. The authors hold firm that cannabis is a strong alternative to alcohol, however, they say that low-end beer brands are the most exposed to substitution risks.
Cannabis Search-Engine Data vs. Alcohol and Tobacco
According to the latest research, online searches for alcohol have seen a drop of nearly 11%, but tobacco products were searched 8% more often from January 2014 to April 2017.
The new data comes from Syracuse University and included 28 million online searches and 120 million ad impressions from a leading U.S. based web portal over the three-year time frame.
The study also found that, in states with the legalization of adult-use cannabis, online searches for cannabis products by adults increased by 17%.
Surprisingly, the data also revealed that searches by those age 19 and younger decreased after cannabis was legalized.
Cannabis-Infused Beverage Sales To Surpass $1 Billion by 2023
Ultimately, both alcohol and cannabis are age-old vices that have been around for at least as long as farming.
However, as millennials take over the marketplace, shifts in preference from alcohol to cannabis could become an overwhelming trend.
Alcohol has a lot of negative health effects that cannabis may not, which is appealing to a more health-conscious market.
Will more adults choose a nice sativa hybrid pre-roll over that bottle of wine this holiday season? It’s too early to tell exactly how these trends will play out long-term, but cannabis is certainly here to stay!
Now that cannabis-infused beverages will soon be hitting the market, we’ll have to revisit this topic in the very near future.US cannabis-based drinks alone are expected to pass $1 billion in sales by 2023 and that could mean an even bigger bite out of big alcohol than anyone is expecting.
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