Marijuana is poised to take the fizz out the American soda market. Now that marijuana legalization has taken over more parts of the country, the nationwide cannabis industry is expected to grow into a ferocious beast worth an estimated $75 billion. According to Bloomberg, that will put the legal pot scene in line to beat out sales of the entire North American carbonated soda market.
It could be said that cannabis is moving up in the ranks of modern industry – even without the support of the federal government. As it stands, there are fewer than 10 states with recreational marijuana laws on the books. Perhaps the biggest development in this movement has been the 2018 launch of recreational marijuana in California.
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But a recent report by the Wall Street investment firm Cowen & Co. finds that the momentum surrounding the marijuana marketplace has been strong enough in recent years to expect larger growth potential than original expected.
The company predicted earlier that the national pot market could hit the $50 million mark within the next decade if that federal government ended pot prohibition. But Cowen analyst Vivien Azner says, “new forecasts suggest that the market is already that size.”
Considering the American soda market has been diminishing for the past few years, as more consumers look to healthier alternative to sugary sodas, marijuana could soon outrank the Coke and Pepsi’s in terms of its financial girth inside the Thunderdome of U.S. commerce. The soft driving industry is currently experiencing a 30-year low, according to the latest trade data. It fell from $78.3 billion in 2016 to $76.4 billion last year.
Although soda is taking a dive, this is not directly related to the legalization of marijuana. But that is not the case with booze. It is the alcohol industry that actually has the most to fear from the rapid spread of legal weed. Cowen’s report shows that binge drinking rates have dropped in states with taxed and regulated marijuana markets.
“We have consistently argued that cannabis and alcohol are substitute social lubricants,” Azner said. But exactly what will be the extent of the damage. That’s anyone’s guess. But it will be significant.
Just last month, a report from BDS Analytics found that cannabis products are already on their way to surpassing craft beer sales in California. Other reports show the alcohol trade is losing millions in legal states, as more people put all or portions of their booze budget into weed.