Marijuana sales could consume more than $2 billion of the beer industry’s current revenue if adult-use cannabis were legalized Nationwide.
According to a new report from Cannabiz Consumer Group (C2G), 27% of 40,000 surveyed consumers said they’d already substituted legal pot for beer, or would love to, provided their state’s marijuana laws were reformed.
For their report, C2G examined “the cannabis mindset” of 40,000 willing participants and have predicted, “legal marijuana will ‘cannabalize’ 7.1% of revenues from the existing retail beer industry.”
C2G examined the “novelty impact” of marijuana on the US beer industry and found individuals who transitioned from beer to pot would be in it for the long haul, according to the report.
“In emerging markets a novelty impact often occurs as new users try a product simply for the experience but do not sustain its use, skewing early market predictions. Results suggest this will not be the case with legalized cannabis, as consumers tend to be more invested in the products that they are buying, including understanding the potency, strains, and formats available and uses for pain management, holistic health, and relaxation. C2G predicts the novelty impact will not be felt in the beer industry.”
A study performed by Cowen & Co. and published in Brewbound last November provided similar guidance based on reports out of Colorado, Washington and Oregon. “While [marijuana]retail sales opened up in these markets at different points of time, with all three of these states now having fully implemented a retail infrastructure, the underperformance of beer in these markets has worsened over the course of 2016.”
The C2G report concluded: “There were 24.6 million legal cannabis consumers in the US in 2016. Legalization has since extended to additional states, either through medicinal or recreational legislation or both. 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.”
While no one knows how or when marijuana prohibition will ultimately end in the US, one thing’s for certain. The fast-growing cannabis industry represents heady competition for big alcohol going forward.
Photo courtesy of Allie Beckett