A new report has found that a quarter of Americans have already substituted beer for cannabis or plan to do so in the future.
Nearly 30 percent of Americans say they now prefer to buy legal cannabis rather than beer, according to a new report from Cannabiz Consumer Group (C2G).
The survey, based on the answers of 40,000 participants in 2016, found that 27 percent of beer drinkers in the U.S. said they have switched to legal marijuana, or would switch if cannabis were legal where they live. C2G estimates that the switch by consumers could cost more than $2 billion in retail sales, 7.1 percent of revenues from the existing beer industry.
There were 24.6 million legal cannabis consumers in the U.S. in 2016, according to the C2G report. With medicinal or recreational legalization expanded to 28 states, and 95 percent of Americans now living in states where cannabis is legally available at some level, C2G believes the nation’s cannabis market will continue to grow.
“C2G’s projects that legal cannabis penetration will settle at a level comparable to that of beer and wine and that a fully mature market would create a new $50 billion industry,” the report reads.
C2G acknowledges that a “novelty impact,” in which new users try a product simply for the experience but do not sustain use, does typically affects new markets. However, they say the study results suggest that this will not be the case for legalized cannabis. Consumers are more invested in products, the report says, including understanding potency, strains, types of products available, and cannabis’ potential therapeutic applications.
Similar market predictions were made recently by investment bank Cowen & Company, which estimated that the U.S. marijuana market would reach $50 billion in 10 years with nationwide legalization. Later, Cowen & Company investigated the cannabis’ industry’s impact on the alcoholic beverage market and reported that sales of beer drop with the legalization of adult use marijuana.
“While recreational cannabis has only limited availability, the rise of cannabis consumption more broadly looks to be weighing on alcoholic beverage consumption, where it is now in decline for men and higher income consumers (while cannabis has gained considerable share with this cohort over the last 5 years),” the report read.
Adult use marijuana is legal in eight U.S. states. Last November, voters in four states — California, Nevada, Massachusetts, and Maine — passed recreational marijuana measures to join Colorado, Washington, Oregon, and Alaska, which already had operational markets. Legalization could expand to more states this year. The nation’s marijuana market had $6.7 billion in sales in 2016, according to cannabis industry research firm Arcview Market Research.
C2G’s forecasts were generated using its CannaUse™ study on the behaviors and attitudes of 40,000 individual participants, point-of-sale data, and the company’s warehouse of over 55 million cannabis purchase transactions. You can read the entire C2G report, “Cannabis legalization a factor in beer sales,” here.
Keep up with the burgeoning legal cannabis industry by regularly visiting our news feed.