The success of cannabis products in the United States is primed to continue growing, but investment bank Cowen & Co. discovered in their study that this growth is impacting other sectors. Most notable is the sharp decline in alcohol consumption rates, especially in areas of the country where cannabis is legalized.
The firm reported that since 2016, U.S. states that legalized cannabis saw binge drinking fall by 11% compared to states without legalized cannabis products. The Centers for Disease Control and Prevention also observed the cannabis impact, noting that binge drinking sessions in states where cannabis is legalized dropped 9% versus the national average.
These falling numbers primarily come from millennials, who are far more likely to consume cannabis instead of alcohol. Yahoo News found that of the 55 million recreational marijuana users in the United States, the majority are millennials. In an interview with MarketWatch, a millennial revealed their preference for cannabis comes down to its lack of intoxicating effects and lower cost than alcohol.
Interestingly this phenomenon does not appear to be universal, as Canada has suffered no drop in drinking rates despite legalizing cannabis earlier than America. Even so, the number of cannabis users within Canada continues to climb. In a survey by Statistics Canada, 18% of Canadians aged 15 and older in Q1 2019 said that they use cannabis, compared to the 14% reporting the same in 2018.
Brock University business professor Michael Armstrong believes the drinking rate in Canada remained the same because consumers are used to the characteristics of drinking. Different products, such as beverages using water-soluble THC, can better impact this market. Potentially because of innovations like this one, the industry will continue growing.
Grand View Research projects the global market for legal marijuana reaching $66.3 billion by the end of 2025.
