Increasing Cannabis Adoption Poses Challenges For Alcohol Industry As Daily Use Surpasses Drinking

The alcohol industry faces potential challenges as daily marijuana use surpasses drinking for the first time in the United States, according to a new report from Carnegie Mellon University.

The study, which analyzed data from over 1.6 million participants across 27 surveys between 1979 and 2022, found that roughly 17.7 million Americans used cannabis daily or near-daily in 2022, compared to 14.7 million daily drinkers. This marks a 15-fold increase in daily marijuana use since 1992.

Analysts on Wall Street believe that increased cannabis adoption, particularly among younger generations, could impact the alcohol industry. Roth MKM analyst Scott Fortune notes that as younger generations grow up with legal cannabis options, acceptance of the drug will become more prevalent and may substitute traditional options like alcohol and tobacco.

Some analysts predict that legal cannabis could negatively impact beer volume growth by up to 230 basis points in Canada and 75 basis points in the U.S. where it is legal. However, conflicting state-by-state policies for cannabis may soften the blow to major brewers and distillers like Constellation Brands, Diageo, AB InBev, and Molson Coors.

As the cannabis industry anticipates the Drug Enforcement Administration’s potential reclassification of marijuana, which would increase access to funding, research, and investment opportunities, the spirits and alcohol industry is working to defend its market share despite shifting trends among younger consumers.