Marijuana is giving soda and beer a run for their money
- Legal marijuana is set to hit $75 billion in sales by 2030, according to a note from analysts at the investment bank Cowen.
- Weed is already putting pressure on alcohol sales. In states that have legalized marijuana, binge drinking rates are declining.
- The market for marijuana could eventually eclipse soda sales.
Soda consumption, on the other hand, is declining. Per capita consumption fell to a 31-year low in the US in 2016, Bloomberg reports, with $76.4 billion in sales in 2017.
In states that have legalized cannabis, binge-drinking rates have fallen 9% below the national average, and 11% below states that don’t allow the sale of recreational marijuana, according to the note. Adults in states with legal cannabis binge drink an average of 13% fewer times per month than those in states without legal recreational marijuana.
“This work builds on our prior assertions that cannabis acts as a substitute social lubricant for consumers,” Azer said in the note.
Nine states allow or will soon allow the sale and consumption of marijuana, representing almost a quarter of the US population.
Marijuana may also prove to be a tax windfall. The industry is expected to generate $17.5 billion in tax revenue by 2030, according to the note.
Legal marijuana sales hit $9.7 billion in sales in 2017, a number that does not include the industry in California, where recreational marijuana sales began on January 1, 2018. That state’s market is predicted to hit $5.1 billion in sales by the end of 2019, outpacing beer sales.
There are still numerous challenges for the booming cannabis market. Marijuana is still considered an illegal, Schedule I substance by the federal government, and many plant-touching businesses don’t have access to traditional banks so can’t open lines of credit.
Attorney General Jeff Sessions is a noted opponent of increasing access to marijuana, and he rescinded Obama-era protections for that limited the federal government’s interference with cannabis businesses.