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 in. 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. 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.
Several of the report’s findings are supported by separate research, including a study published last month that found marijuana legalization may be linked to a “substitution effect,” with young adults in California “significantly” reducing their use of alcohol and cigarettes after the cannabis reform was enacted.
