Cannabis and Alcohol: An Industry Comparison
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Cannabis and Alcohol: An Industry Comparison

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Cannabis and Alcohol: An Industry Comparison

As cannabis continues to build legalization momentum in the U.S., it also finds itself entering a new chapter, and one that steps away from its prohibition past.

The industry is now on a path similar to that of the alcohol industry during the 20th century. So what can we learn by comparing the two industries?

This infographic from Tenacious Labs looks at similarities and differences between alcohol and cannabis in relation to market maturity, legality, and cultural acceptance. It’s the second in a series that explores the future of the cannabis industry. Let’s dive in.

Sizing up the Market

We are entering what looks like the beginning of the end for cannabis prohibition in the U.S. which dates all the way back to 1937.

During this time, cannabis has faced extreme hurdles that have hampered its ability to flourish. But despite this bumpy past, the future of cannabis looks bright. In 2020, combined legal and illicit cannabis sales in the U.S. grew to be worth a combined $85 billion.

While this only represents 33% of total U.S. alcohol sales, consumption habits are changing quickly. For instance, the share of college students who drink daily fell from 6.5% in 1980 to 2.2% in 2017, and Americans overall are drinking far less these days compared to the 1980s.

On the other hand, cannabis holds a larger and growing influence amongst Americans old and young. In fact, the number of Americans who say they consume cannabis doubled from 28 million in 2009 to 48 million just a decade later.

YearNumber of Americans Who Have Used Cannabis In the Past Year
201948.2 Million
201843.4 Million
201740.9 Million
201637.5 Million
201536.0 Million
201435.1 Million
201332.9 Million
201231.5 Million
201129.7 Million
201029.3 Million
200928.6 Million

And since younger people nowadays are opting for cannabis over alcohol, the growth in their purchasing power in the years to come will likely have substantial influence on the alcohol and cannabis markets of tomorrow.

Legal Comparisons

Cannabis’ prohibition period length stands at over 6x the prohibition period compared to alcohol. Not to mention, there are still some 30 states that have yet to legalize recreational cannabis, also known as adult use.

StateState Level Legal Status Of Cannabis
AlabamaLegal for medical use
AlaskaLegal
ArizonaLegal
ArkansasLegal for medical use
CaliforniaLegal
ColoradoLegal
ConnecticutLegal
DelawareLegal for medical use
FloridaLegal for medical use
GeorgiaLegal for medical use
HawaiiLegal for medical use
IdahoIllegal
IllinoisLegal
IndianaLegal for medical use
IowaLegal for medical use
KansasIllegal
KentuckyIllegal
LouisianaLegal for medical use
MaineLegal
MarylandLegal for medical use
MassachusettsLegal
MichiganLegal
MinnesotaLegal for medical use
MississippiLegal for medical use
MissouriLegal for medical use
MontanaLegal
NebraskaIllegal, decriminalized
NevadaLegal
New HampshireLegal for medical use
New JerseyLegal
New MexicoLegal
New YorkLegal
North CarolinaLegal for medical use
North DakotaLegal for medical use
OhioLegal for medical use
OklahomaLegal for medical use
OregonLegal
PennsylvaniaLegal for medical use
Rhode IslandLegal for medical use
South CarolinaLegal for medical use
South DakotaLegal for medical use
TennesseeLegal for medical use (Limited)
TexasLegal for medical use (Limited)
UtahLegal for medical use
VermontLegal
VirginiaLegal
WashingtonLegal
Washington, DCLegal
West VirginiaLegal for medical use
WisconsinIllegal
WyomingIllegal

Despite this, the progress recently has been significant. While 70% of Americans opposed cannabis use in the 1970s, the same amount of the population now supports legalization today.

Health Factors

Global views on cannabis and alcohol are changing, and in very different ways. Nowadays, alcohol is seen as more dangerous than what was initially perceived in the past, while cannabis is shattering old stigmas as 74% of Americans believe cannabis to be safer than alcohol.

According to Our World in Data, alcohol use is responsible for 2.8 million deaths worldwide, while no such statistic exists for cannabis.

Risk FactorNumber of Deaths Worldwide (M)
High blood pressure10.4 Million
Smoking7.1 Million
High blood sugar6.5 Million
Air pollution (outdoor & indoor)4.9 Million
Obesity4.7 Million
Diet high in sodium3.2 Million
Diet low in whole grains3.0 Million
Alcohol use2.8 Million
Diet low in fruits2.4 Million
Diet low in nuts and seeds2.0 Million

It is perhaps unsurprising given the case against alcohol use that 57% of Americans would choose cannabis over alcohol if only one could be legal.

What Cannabis Can Learn From Alcohol

Alcohol has become a near quarter-trillion-dollar revenue generating industry in part because of its functioning regulations. The standardization of alcoholic drinks is fairly widespread, and as a result people can safely and conveniently convert units of alcohol from a pint of beer to a glass of wine in order to drink responsibly.

Similarly, an effective regulatory framework from the National Cannabis Industry Association also has the potential to propel the cannabis industry to new heights by categorizing cannabis products into four policy lanes:

  • Lane 1: Products approved as pharmaceutical drugs belong to Lane 1 and go through the rigorous drug approval process by the FDA.
  • Lane 2: These are cannabis products that are inhalable, edible, or topically applied, and are not approved as pharmaceutical drugs by the FDA. In addition, products in Lane 2 have greater than 0.3% THC, measured by dry weight.
  • Lane 3: Ingested and inhaled products with less than 0.3% THC make it onto Lane 3. These are cannabis products with little to no THC, and thus no psychoactive components in the plant.
  • Lane 4: Topically applied products like creams and balms, with less than 0.3% THC fall under the Lane 4 category.

It should be noted that regulatory frameworks for cannabis are still in their introductory stage, and amendments as well as changes in legislation are needed for further progress.

A New Chapter for Cannabis

It’s an exciting time to be a cannabis investor. The era of cannabis prohibition could be coming to a close. Even after lasting over 80 years, cannabis remains a robust and popular product within American culture.

And rather than competing head on with alcohol, it’s likely the two industries can co-exist. In fact, most industry insiders are betting on it. After all, alcohol companies have already made a flurry of corporate investments in the cannabis space worth billions of dollars.

If cannabis’s recent momentum and growth is any indication, it’s one that may hold plenty of upside.

In the next part of the Future of Cannabis Series, we will explore the The New Cannabis Consumer.

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