A multinational investment bank says that marijuana has become a “formidable competitor” 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.
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’s up from four percent just five years ago, and marijuana is expected to grow by another seven percent annually over the next five years.
“As 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,” the report, titled “Cannabis Beats Booze,” says.
Vivien Azer, team lead on the analysis, told Marijuana Moment that the report bolsters a growing body of market research.
“We’ve been calling for seven years now for cannabis to increasingly prove as a dislocator to alcohol sales—and, really, it’s just a matter of time,” she said. However, she said it was “a little surprising” to see data projecting an even greater underperformance for alcohol sales in legal marijuana states.
While marijuana sales are still just a fraction of the dominant alcohol market, analysts say that there’s reason to believe that booze could be “at risk” 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.
Hellbound and Down 