Booze sales still dwarf cannabis, but study finds cannabis is quickly gaining ground as new state markets launch
“Cannabis beats booze,” a new report from TD Cowen, shows cannabis growth is outpacing alcohol. The report, initially reported by Green Market Report, finds that cannabis sales growth is outpacing alcohol sales growth in states where adults have legal access to cannabis.
The report analyzed 8 million consumer data points, 20 years of government surveys and spending data and proprietary data, estimates that cannabis sales will reach $37 billion by 2027.
However, cannabis sales predictions are mercurial at best with other analytics firms such as BDSA predicting the U.S. market to reach $43 billion in 2027, and Prohibition Partners predicting the nation to hit $33 billion the same year.
The cannabis industry’s $29 billion in sales for 2023, according to the report, are still a fraction of the alcohol industry’s roughly $264 million in sales. Five years ago, cannabis sales were only 4% of alcohol sales, compared to 11% today.
The report says cannabis is gaining serious ground against the country’s No. 1 libation and estimates the number of new cannabis consumers will quadruple in five years to 18 million people, whereas alcohol may lose up to 2 million consumers. Consequently, tax revenue from cannabis is becoming increasingly important for states that have legalized. For example, Illinois cannabis tax revenue during the 2023 fiscal year greatly surpassed alcohol, bringing in $451.9 million, compared to the $316.3 million booze brought in during the same time.
A 2,500-person survey conducted by TD Cowen researchers shows that about 60% of cannabis users report cutting back on drinking alcohol.