The legal cannabis industry has been experiencing tremendous growth in recent years. As more states legalize both medical and recreational marijuana, total sales continue to increase year after year. This noticeable cannabis market growth is having impacts on other established industries like alcohol, pharmaceuticals, and tobacco. In this blog post, we’ll explore how the booming cannabis business is disrupting these traditional markets.
Cannabis Eating into Alcohol SalesOne of the most direct effects of rising cannabis sales is the reduction in alcohol consumption. Many consumers are now substituting weed for booze. This trend is especially pronounced among younger demographics. The main reason is that cannabis can provide a milder and safer “high” compared to alcohol. People are beginning to view weed as an alcohol alternative for relaxing and social situations. While too much alcohol can lead to loss of control, nausea, and hangovers, cannabis allows users to still feel functional. The growing preference for weed is now motivating a decline in liquor sales.
Pharmaceutical Companies Feeling the Heat from Medical MarijuanaAnother industry facing disruption from cannabis legalization is pharmaceuticals. As medical marijuana becomes more widespread, people are using it instead of prescription medications for certain conditions. Chronic pain, anxiety, seizures, and insomnia are some of the major areas where cannabis is replacing pharmaceutical drugs. One study found a significant drop in Medicare and Medicaid prescriptions in states with legal medical marijuana. The decline was most pronounced for pain medications. With its ability to alleviate pain without causing dependency or overdoses like opioids, cannabis is becoming the safer choice. This substitution effect is estimated to cost drug companies billions in lost revenues.
Tobacco Usage Down as Cannabis Goes MainstreamWhile not as directly correlated with alcohol and pharmaceuticals, the growing normalization of cannabis is also reducing tobacco consumption, especially among young people. Over the past decade, cigarette smoking rates among teens have been dropping steadily as vaping and cannabis usage increases. The younger generation seems to view marijuana as a safer alternative social pastime than tobacco. Cannabis is perceived as more natural and less addictive than nicotine. The cannabis boom is accelerating the decline of tobacco among youths. Tobacco companies are taking notice by investing in marijuana firms and considering introducing cannabis products of their own. An evolving regulatory environment also makes cannabis seem more appealing than highly taxed and restricted tobacco products.
Key Takeaways on Cannabis DisruptionCannabis market growth is having major ripple effects across other sectors:
- Alcohol sales are declining as consumers, especially younger demographics, replace drinking with cannabis consumption. Weed provides a milder intoxication and social experience.
- Medical marijuana utilization is reducing prescriptions for medications like painkillers, anti-anxiety drugs, and sleeping pills. Cannabis is seen as a safer alternative.
- Mainstream acceptance of cannabis is contributing to decreased tobacco usage rates among teens who view marijuana as less harmful than cigarettes.