Experts are predicting a huge increase in marijuana sales. According to Cowen & Co, a research company, U.S. marijuana sales will rise to $75 billion in the next twelve years. As soda’s popularity wanes, legal marijuana sales could surpass soda sales by 2030.
Weed Is More Popular Than Ever. Soda Isn’t.
Recreational marijuana is legal in 9 states, and more are expected to follow suit this year. In addition to these states that allow recreational marijuana use, medical marijuana accessibility is on the rise. According to Bloomberg, over 1/5 of Americans can smoke the herb whenever they want.
More Americans and Canadians than ever are taking advantage of legalization. In 2016, Americans and Canadians combined spend $53.3 billion on weed. This makes Cowen & Co’s initial report that the marijuana market will make $50 billion annually by 2026 alone seem low.
The soft drink market is experiencing the opposite trend. North American soda consumption fell to a 31-year low in 2017. Euromonitor International calculated that the soft drink market went from $78.3 billion in 2016 to $76.4 billion in 2017.
Data analysts expect the trend towards weed, which has numerous health benefits, and away from sugary soft drinks to continue.
Predicted Weed Sales in 2030
This means big profits for legal recreational weed. Noting the sharp increase in weed consumption, Cowen & Co amended its initial prediction of $50 billion per year. Analyst Vivien Azer tells Bloomberg, “New forecasts suggest that the market is already that size.”
The firm now predicts that the weed market will earn $75 billion by 2030. This is closely behind the soft drink market in 2017, which made $76.4 billion. Furthermore, experts expect the profits reaped by soft drink companies to diminish while the weed industry grows.
Will Weed Impact Alcohol Sales?
Legal marijuana sales could surpass soda sales by 2030 not because weed is replacing soda, but because people are considering healthier options. Comparatively, marijuana legalization could have a direct impact on alcohol sales.
Two studies suggest that marijuana reduces, rather than increases, alcohol consumption as was previously believed. Published in 2017, Helping Settle the Marijuana and Alcohol Debate: Evidence from Scanner Data looks at the correlation between the two. This study found that legalizing marijuana reduced alcohol sales by 13.8 to 16.2 percent. the study concludes, “We find that marijuana and alcohol are strong substitutes.”
A second study only recorded data from states where medical marijuana is legal. Researchers still discovered that legal medical marijuana decreased alcohol sales. Georgia State University economics professor Alberto Chong explains, “The drop in [alcohol] sales is so huge—it’s like 13 percent—that there has to be some leakage.”
Liquor companies are well aware of the negative impact recreational marijuana can have on liquor sales. California’s Proposition 19, failed to pass in 2010 due to the efforts of the liquor lobby. Wikileaks divulged that Wine & Spirits Wholesalers of America contributed to political forces against legalization.
Final Hit: Legal Marijuana Sales Could Surpass Soda Sales by 2030
It’s hard to imagine the scale or the effects that legal marijuana will have in the near future. With federal legalization, marijuana sales could eclipse soft drink sales and take a chunk out of the alcohol industry’s profits. But for the time being, it looks like marijuana will be making $75 billion annually in twelve years.