420 with CNW — Report Shows the US Cannabis Industry Now Employs 440,000 Full-Time

A recent yearly report on marijuana sector employment in the United States reveals a nearly 5% increase in full-time cannabis jobs over the past year, marking a turnaround from the approximately 2% decline compared to 2022. Despite this increase, it represents the smallest annual growth since 2017.

According to the report by Vangst, a Colorado-based cannabis staffing company, and Whitney Economics, an analytics company, legal marijuana in the United States now supports more than 440,000 full-time workers. However, the report highlights that job growth was not evenly distributed across the country.

In states such as Michigan where cannabis sales have increased, significant job growth was observed: 11,000 jobs, representing a 39% increase compared to the previous year. Meanwhile, Missouri, in its first complete year of recreational sales, saw an addition of 10,735 jobs. Utah, Rhode Island, New Mexico, New York, Connecticut, New Jersey and Maryland also experienced job growth.

However, more established markets such as Washington and Colorado saw job losses, with the two states reporting a 15% and 16% decline, respectively. California, despite its large market, saw a 6% decrease compared to the previous year. The report attributes these losses to various factors, including cannabis oversupply and a decline in cannabis-related tourism. For instance, the expansion of recreational sales to 20 states has reduced cannabis tourism in Colorado significantly.

Despite these challenges, the report remains optimistic about the industry’s future and predicts a recovery in the upcoming years. It anticipates losses in mature markets to decrease in 2024 and improve once more in 2025.

Looking ahead, the report projects that the legal marijuana industry in the United States will bring in $87 billion by 2035, more than tripling the $28.8 billion it brought in in 2023.

Apart from talking about employment figures, the report also provides insights into the wages of various positions within the cannabis industry. Retail directors make approximately $80,000 a year, whereas trimmers make between $14 to $27 per hour. On the other hand, cultivation directors get about $90,000, while budtenders make about $14 to $22 per hour.

Karson Humiston, CEO and founder of Vangst, noted the importance of their job-tracking initiative, especially considering the lack of federal government involvement in the cannabis industry. While the Vangst report does not delve into the impact of unionization on the industry, it acknowledges the varying trends in state cannabis revenue, noting that sales in new markets tend to grow rapidly. With more states expected to legalize marijuana in the future, the overall cannabis market in the U.S. is projected to continue expanding.

It would be interesting to see the findings of a similar analysis focused on how the marijuana industry is boosting other industries and verticals, such as the real estate niche in which companies such as Innovative Industrial Properties Inc. (NYSE: IIPR) operate and serve marijuana businesses.

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CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of an article each business day at 4:20 p.m. Eastern – a tribute to the time synonymous with cannabis culture. The concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.

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420 with CNW — Florida’s Highest Court Greenlights Adult-Use Marijuana Ballot Measure

Florida’s Supreme Court rendered a ruling on April 1, 2024, permitting an initiative aiming to legalize recreational cannabis to be included on the state’s November ballot. Two justices dissented from the measure, while five justices were in support of it.

The proposed measure would allow anybody who is 21 years of age or older to own, purchase or use cannabis products and accessories for their own personal use, including smoking, ingesting or using in other ways. It also authorizes medical-marijuana treatment facilities and other licensed businesses to carry out operations such as purchasing, growing, processing, producing, selling and distributing accessories and products.

The legislation faces opposition from a large number of Republicans, including the office of the state attorney general, necessitating 60% approval from voters to pass. Justice Jamie R. Grosshans explained the court’s position, reiterating that the amendment complies with constitutional criteria and is presented in an understandable manner.

Grosshans, appointed by Governor Ron DeSantis, emphasized the court’s limited role, confined to assessing single-subject conformity, clarity of the ballot summary and facial validity under the federal constitution. Consequently, he noted that the court approved the proposed amendment for inclusion on the ballot based on these limitations.

The legality of cannabis varies by state, with more than 40 states allowing its usage for either medical or recreational purposes.

One of the initiative’s supporters, Smart and Safe Florida, expressed satisfaction with the court’s ruling, emphasizing how pleased it was with the ballot’s lucid language and the chance it gave voters to weigh in on this important issue.

While the offices of the governor and the state attorney general did not immediately comment on the ruling, it’s notable that the attorney general had previously opposed the initiative, arguing that it was misleading.

In addition to the cannabis legalization initiative, the court also addressed abortion-related matters. It upheld a 15-week abortion ban, meaning a previously signed six-week ban by Governor DeSantis will now be enforced. However, the court ruled in favor of including a proposed amendment aimed at safeguarding abortion rights in the state constitution on the ballot.

During his reelection campaign, President Joe Biden criticized Florida’s abortion prohibition in a memo, suggesting that his administration will bring abortion rights to the forefront of the political agenda in November. This move was seen as potentially advantageous for Biden, with the state, previously won by former President Donald Trump, now considered within Biden’s reach.

If the voters in Florida approve the legalization of recreational cannabis, the launch of that market could open opportunities for not just cannabis companies but ancillary ones as well operating akin to companies such as Innovative Industrial Properties Inc. (NYSE: IIPR).

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420 with CNW — New York to Evaluate Struggling Cannabis Industry as Hiccups Allow Illicit Market to Flourish

Kathy Hochul, the governor of New York, has issued an order to reassess the state’s adult-use cannabis licensing program due to various setbacks. Those hurdles, including lawsuits and administrative challenges, have not only stood in the way of the legal marijuana market but have also led to the proliferation of illicit sellers.

The assessment aims to identify ways to expedite license processing and facilitate quicker business openings. Additionally, the assessment will conduct a comprehensive review of the state’s Office of Cannabis Management’s (OCM) organizational structure and procedures.

Hochul, a member of the Democratic Party, has openly complained about the launch process of recreational cannabis in the state, referring to it as a failure. Since the commencement of sales in 2022, just a little more than 80 legal dispensaries have been established.

The initial phase of the legalization law allocated retail licenses exclusively to nonprofit organizations and people with previous cannabis-related convictions. Additionally, it introduced a $200 million equity fund aimed at assisting applicants adversely impacted by the drug war in setting up dispensaries.

However, the licensing procedure encountered legal obstacles and implementing the equity fund faced delays, thereby impeding the legal marijuana market from thriving. Consequently, unauthorized dispensaries began to emerge throughout the state, particularly in New York City. The situation became so problematic that Hochul requested online platforms such as Yelp and Google refrain from listing these illegal establishments.

Despite efforts to regulate the market, the regulatory bodies struggled to cope with the overwhelming number of license applications. The OCM, responsible for processing licenses, has only 32 employees dedicated to reviewing applications, while it has received about 7,000 applications last year.

This decision to review the program came shortly after a senior official at the agency was sent on administrative leave after allegations from the NY Cannabis Insider that the agency had exhibited biased enforcement practices, particularly targeting a cannabis processor. Commissioner Jeanette Moy of the Office of General Services, along with other state officials, will spend at least 30 days immersed in the agency as part of the assessment process. Together, the team will develop plans to improve the agency’s operations and set performance standards for subsequent projects.

OCM’s executive director, Chris Alexander, acknowledged the progress made in building an equitable marijuana market but emphasized the need for improvement in the agency’s operations. He expressed confidence in Moy’s leadership abilities and her capacity to steer the agency in the right direction.

The delays in having a flourishing legal marijuana market in New York is potentially stifling opportunities for local ancillary companies operating similar to Innovative Industrial Properties Inc. (NYSE: IIPR) that would have sprouted and carved out a niche for themselves in this state.

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420 with CNW — New Study Suggests Cannabis Handouts Could Curb Drug Overdose Fatalities

A new study published in the “Journal of Harm Reduction” proposes that distributing free marijuana through harm-reduction groups could significantly decrease drug overdose fatalities and enhance the well-being of users. The study, focusing on a cannabis donation initiative in rural Michigan, marks the pioneering documentation of the harm-reduction approach in the United States, suggesting its potential sustainability contingent upon state regulations.

While acknowledging existing obstacles in marijuana distribution and regulation policies, study authors emphasize the perceived advantages recognized by harm-reduction practitioners. Those advantages include reduced premature mortality, enhanced life quality, pain alleviation, better recovery prospects and heightened safety for both communities and clients.

Spanning from September 2021 to May 2023, the observation involved 10 marijuana-experienced harm-reduction participants who received weekly marijuana allocations through deliveries or pickups. The suitability of the allocations was assessed by clinical staff based on interest and need.

Upon reporting their interactions with participants, staff highlighted numerous observed benefits. For instance, a patient (aged 50 years of age or older), having undergone complex spinal fusion surgery, previously struggled with alcohol abstinence but achieved complete sobriety during recovery, expressing gratitude for the pain relief provided by marijuana products. Similarly, a pregnant participant in her 20s, initially homeless and dependent on opioids and methamphetamine, reduced the frequency of substance use with the aid of donated marijuana products after actively seeking assistance from harm-reduction agencies to access treatment for opioid use disorder during pregnancy.

Examining data from a contributing marijuana company, the study unveiled insights into product varieties and donation scales. Notably, while flower products dominated medical and recreational sales, donations primarily comprised topical, oil and edible products. Furthermore, donation costs represented a mere 1% of overall gross sales, falling considerably below the anticipated annual donation volume.

The authors stress the necessity for further research to fully understand the effects on individuals, the implications for public health, the legal requirements and the best practices for marijuana donation. In light of the persistent overdose mortality linked to illicit fentanyl and synthetic contaminants, the report advocates for harm-reduction practitioners to uphold client autonomy and mutual aid, including the provision of safe psychoactive products to drug users.

While refraining from drawing definitive conclusions regarding the overarching efficacy of harm-reduction endeavors, the analysis relies on interviews with the program administrators, outlining the exploratory nature of the study and its focus on depicting the organic evolution of marijuana donation within a regulated state framework. Overall, the findings underscore the viability of such initiatives, notably the minimal contribution of commercial cannabis companies’ donations to their overall product inventory, affirming the potential scalability and sustainability of marijuana donation programs within harm-reduction frameworks.

Further studies may be needed to ascertain the best ways in which these donations can help those at risk of drug overdose death. As this concept becomes better understood, a clearer picture is likely to emerge of how cannabis legalization can be a major force for good in society well beyond allowing an ecosystem of ancillary businesses, such as Innovative Industrial Properties Inc. (NYSE: IIPR), to thrive around the mainstream marijuana industry.

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420 with CNW — Veterans Groups Urge Biden Administration to Reclassify Cannabis

Leading U.S. veterans’ organizations are urging the Biden administration to promptly relax federal marijuana laws, aligning with a growing chorus of voices advocating for rescheduling the substance six months after a recommendation from the U.S. Department of Health and Human Services (HHS). Expressing their sentiments in a recent letter, the groups have called upon the Department of Justice, which oversees the U.S. Drug Enforcement Administration (DEA), to take swift action.

Highlighting the challenges faced by veterans of the United States Armed Forces when they return home, the coalition, comprising entities such as the Minority Veterans of America, AMVETS, Iraq and Afghanistan Veterans of America, the American GI Forum, the Blinded Veterans Association and the American Legion, emphasized the importance of offering a broad spectrum of treatments to address both visible and invisible war wounds.

Currently categorized as a Schedule I drug, alongside drugs such as heroin, marijuana is deemed to have a high potential for misuse and no known medical uses. The HHS has recommended moving it to Schedule III, a significantly less-restrictive classification.

In October 2022, President Joseph Biden initiated a review of the federal cannabis policy, and insiders anticipate a formal decision from the DEA imminently, possibly within the upcoming weeks.

Although the Veterans Affairs (VA) Department isn’t allowed to refuse medical care to veterans who use cannabis in states where it is legal, the agency doesn’t cover prescriptions or offer medical cannabis as a treatment. Last year, a joint recommendation from the Defense Department and the VA advised against cannabis use for PTSD.

However, the veterans’ coalition argues that their members need this option, pointing to an American Legion survey where 82% of participants expressed a preference for federally approved medical marijuana treatment. The coalition underscored that without DEA action, many veterans are reluctant to discuss marijuana use with their VA clinicians, fearing repercussions.

Acknowledging the lengthy administrative scheduling procedure, the groups stressed the advantages of the DEA’s quick reclassification, which could include incorporation into the VHA, the biggest healthcare system in the nation.

Their appeal coincides with mounting Congressional efforts to reform federal marijuana policies. Bipartisan lawmakers from both chambers have proposed numerous bills related to cannabis and veterans, such as enabling VA providers to prescribe medical cannabis in legalized states and mandating marijuana studies on veterans with PTSD and chronic pain.

Public opinion increasingly favors cannabis legalization as well, as evidenced by a Gallup survey indicating that 70% of U.S. adults support it, including a significant number of younger voters and most Republicans.

A cohort of Democrats, led by Chuck Schumer, the Senate Majority Leader, recently pushed the DEA to take marijuana off of scheduling entirely, highlighting this as a once-in-a-decade opportunity for the Biden administration to take action.

Any change to the classification of cannabis at the federal level is likely to result in some improved regulatory environment for cannabis companies and ancillary businesses such as Innovative Industrial Properties Inc. (NYSE: IIPR) as the red tape that goes with this industry can be stifling at times.

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420 with CNW — Poll Suggests 32% of Americans Would Resort to Black Market If Cannabis Only Available in Pharmacies

A recent poll indicates that almost one-third of marijuana consumers nationwide would return to purchasing from illegal sources if marijuana were to be rescheduled without preserving legal state marketplaces. The survey, conducted by a website that facilitates medical cannabis physician evaluations, involved nearly 800 respondents.

NuggMD.com reported that its survey findings showed that if cannabis was rescheduled, restricting its legal access to FDA-approved prescription medications, 32% of participants would head to the black market. An estimated 55% of respondents preferred using pharmacies to obtain cannabis, indicating a large preference for legal sources.

Last year, the U.S. Department of Health and Human Services (HHS) made a recommendation to the U.S. Drug Enforcement Administration (DEA), urging the agency to reclassify marijuana from Schedule I to III of the CSA. However, rescheduling would not automatically grant cannabis the status of a legitimate prescription medication. This is because the FDA adopts a distinct drug-approval process and typically excludes botanical substances as prescription drugs.

Despite this, the poll explores how cannabis users might react if their only access is through pharmacies, treating cannabis similarly to other Schedule III drugs. Drugs in this category are usually prescribed and available through pharmacies or under a physician’s supervision. The survey also provides insight into how users feel about possible marijuana schedule changes. Although 47% of respondents think that rescheduling wouldn’t impact their access, a sizable number — 77% of respondents — would rather purchase dispensary cannabis than depend on FDA-approved pharmacies.

Additionally, the poll reveals opinions about federal regulation. Significantly, 69% of respondents prefer separate state markets to a single federal market, and 85% of respondents support removing marijuana from the CSA rather than moving it to Schedule III.

Consumers also express a reluctance to involve the FDA or pharmaceutical companies in marijuana regulation, signaling a strong trust in state-controlled markets. Interestingly, a significant portion is willing to obtain marijuana, even if it means ignoring legal restrictions.

Although reclassifying cannabis from Schedule I to III could facilitate medical use and encourage the creation of FDA-approved medications, the process of doing so takes time. State-licensed dispensaries will probably continue to be accessible for both recreational and medical consumers until then.

There is also skepticism about products, such as raw cannabis flower, gaining approval. This skepticism highlights the need for substitute medical-grade products that can be purchased from pharmacies.

Despite potential changes, legal state markets are expected to remain, providing accessibility and lowering reliance on the black market.

It remains to be seen how the implementation of the expected rescheduling of marijuana will affect companies such as Innovative Industrial Properties Inc. (NYSE: IIPR) that had found a lucrative niche serving plant-touching cannabis companies.

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CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.

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420 with CNW — Congressional Researchers Highlight Shortcomings of Cannabis Rescheduling Recommendation

A recently published Congressional Research Service (CRS) report has highlighted the potential shortcomings of the U.S. Department of Health and Human Services’ (HHS) marijuana rescheduling recommendation. Last year, the HHS published a series of documents recommending that the U. S. Drug Enforcement Administration (DEA) reschedule marijuana to Schedule III of the Controlled Substances Act. HHS officials justified the recommendation on the grounds that cannabis currently has “accepted medical uses” and thus did not meet the conditions required of Schedule I drugs.

Rescheduling cannabis from Schedule I to Schedule III would finally make it legal for doctors to prescribe marijuana at the federal level and would be a major step forward for the country’s medical marijuana industry. However, Congressional researchers argue that the rescheduling recommendation has many shortcomings. The recent report outlined the legal consequences of rescheduling marijuana.

It noted that the country’s state marijuana markets would still be illegal at the federal level and certain cannabis activity-related criminal penalties would remain in place even if cannabis is rescheduled. According to the CRS, approving the rescheduling without any additional legal changes would not make the state legal recreational and medical marijuana industries compliant with the federal Controlled Substances Act.

The report said that while moving cannabis to Schedule III would make it legal for doctors to prescribe it, the U.S. Food and Drug Administration (FDA) would first have to approve cannabis medicines before federal law allows physicians to prescribe cannabis.

Additionally, the manufacturers and distributors of any cannabis products that receive FDA approval would have to register with the DEA and meet regulatory requirements for drugs in Schedule III of the Controlled Substances Act before they can begin handling their respective products. Medical marijuana users would also need to acquire prescriptions from licensed medical providers that will most likely be subject to different federal requirements. The report adds that the rescheduling will only change certain criminal penalties while some marijuana-related penalties would remain unchanged.

On a positive note, the report noted that the rescheduling would finally allow cannabis businesses to deduct their business expenses when they file their federal taxes, something they have been unable to do since the industry’s inception due to federal prohibition. The CRS report also said that regardless of how the rescheduling issue plays out, the Justice Department wouldn’t be able to interfere with state medical cannabis programs, thanks to an appropriations rider renewed annually by Congress since 2012.

As long as the rider remains in place, the report explains, players in America’s state-legal medical cannabis industry will be protected from federal prosecution as long as they comply with state cannabis law.

Despite these shortcomings revealed in the CRS report, cannabis industry actors and ancillary companies such as Innovative Industrial Properties Inc. (NYSE: IIPR) are likely to see the rescheduling of marijuana to Schedule III as a step in the right direction. Other reforms can follow this significant step in due course.

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420 with CNW — UFC Officially Strikes Cannabis Off List of Banned Substances

During the last week of December, the Ultimate Fighting Championship (UFC) announced that was formally eliminating cannabis from its list of banned substances for athletes. The change in policy, which took effect on Dec. 31, 2023, also involves entering into a partnership with Drug Free Sport International, its sample collection and shipping company.

The UFC also revealed that it was amending its list based on historical findings, despite stating that it was modelling its list of prohibited substances after the World Anti-Doping Agency.

In 2021, the UFC adopted a policy change that protected professional fighters from penalizations over positive THC tests.

In a press release, UFC’s Hunter Campbell stated that the organization’s objective was to have the best, most progressive and most effective antidoping program in all professional sports. Campbell, the organization’s chief business officer, added that the organization would continue independently administering its drug-testing program, which ensured that all UFC athletes competed under equal and fair circumstances. He also highlighted that the organization was proud of the advancements it has made with its antidoping program over the last eight years.

Jeff Novitzky, senior VP of Athlete Health and Performance at UFC, stated that the updated program was the result of years of trial and error by the organization as well as the incorporation of input. Novitzky added that the antidoping policy was a document that would continue adapting and evolving as science supported changes that could further protect athletes that competed in UFC.

As the legalization movement grows across the country, a growing number of sports organizations are moving to amend their cannabis testing policies for athletes. For instance, the National Basketball Association and its players’ union signed a collective bargaining agreement in June 2023 that involved the removal of cannabis from the league’s list of banned substances and laid out rules permitting players to promote marijuana brands and invest in them, with some exceptions.

In July, the New York Media Softball League announced that it was launching a sponsorship deal with Cornbread Hemp, a CBD company based in Kentucky. The idea behind the collaboration was inspired by moves by teams such as the Chicago Cubs and Kansas City Royals as well as Major League Baseball, which have also partnered with CBD businesses.

In September 2023, a National Collegiate Athletic Association committee gave its formal recommendation that divisional governing bodies eliminate marijuana from the banned substances list for college athletes. That same year, sports regulators in the state of Nevada voted to present a proposed regulatory amendment to the governor that would shield athletes from penalties over the possession or use of cannabis in compliance with state law.

The changing attitudes of sports bodies toward cannabis could help to remove concerns that some sections of the society may have had about this substance, and as the uptake of marijuana increases, ancillary companies such as Innovative Industrial Properties Inc. (NYSE: IIPR) could do more business with marijuana industry actors looking to meet the growing customer demand.

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420 with CNW — Arizona Uses Cannabis Taxes to Give 18 Nonprofits Justice Reinvestment Grants

Arizona state officials recently announced that Arizona has started awarding the first round of justice reinvestment grants to nearly 20 nonprofits across the state. The state’s cannabis law, Proposition 207, created the grant program to support efforts such as substance-use prevention and treatment, public and behavioral health, mentorship programs and workforce development in economically disenfranchised regions.

Using funds drawn from cannabis taxes, the program would also support efforts to address the root causes of crime, reduce Arizona’s prison population, expunge certain cannabis-related criminal records and restore civil rights.

As per Proposition 207, the program receives 35% of Arizona’s Justice Reinvestment Fund, which is funded by 10% of Arizona’s cannabis sales tax revenue. An additional 35% of the Justice Reinvestment Fund is earmarked for county public health departments while the remaining 30% goes to the Arizona Department of Health Services (ADHS) to address critical public health issues that affect Arizona.

Recipients of the first round of grants include Northland Family Health Center, Hushabye Nursery, Axiom Community of Recovery, Stuck Community Acupuncture, Cihuapactli Collective, Phoenix Indian Center, Friendly House, Persevere, Arouet Foundation, Jobs for Arizona’s Graduates (JAG) and Constructive Circles of Peace.

The rest of the 18 grants went to the Arizona Democracy Resource Center, Our Sister Our Brother, Southern Arizona Legal Aid, the Bambi Fundjust Communities Arizona, Regional Center for Border Health Yuma, and Regional Center for Border Health Parker.

A press statement from ADHS noted that the office “identified priority communities’” in Arizona and held 18 listening sessions to highlight public interest in services that participants believed would benefit their communities. This includes improving neighborhood safety and developing community spaces such as community centers and parks, providing training on cultural awareness, culturally appropriate health services, youth development, substance education and prevention services, technology training for former inmates, and increasing access to affordable housing and healthy food.

According to ADHS, all the projects that received grants represent communities from across the state and focus on the key areas detailed during the community listening sessions.

ADHA noted that the Office of Health Equity would create a “robust evaluation process” to make sure that the program funds projects that bring a positive impact by serving the intended communities. Such a program evaluation process would assess if grant applicants meet the outlined goals and use collected data to continuously improve the program, ADHS said.

Arizona isn’t the only state that has earmarked a portion of its cannabis revenue for community reinvestment. California recently announced that applications for $48 million in cannabis tax-funded community reinvestment grants were open. New Jersey has also opened an application round for the state’s marijuana tax-funded social equity program.

The benefits that cannabis companies and ancillary companies such as Innovative Industrial Properties Inc. (NYSE: IIPR) bring through the taxes they pay in the different jurisdictions where they operate highlight some of the socioeconomic value of cannabis legalization.

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420 with CNW — Investment Bank Expects Cannabis to Draw Millions of Customers from Alcohol

Analysis by a multinational investment bank has found that cannabis has grown into a “formidable competitor” to alcohol and will draw tens of millions of users over the next five years while alcohol loses several million drinkers. The TD Cowen analysis estimates that marijuana sales will hit a whopping $37 billion in 2027 as more states legalize cannabis and launch legal sales.

Alcohol has been the main drug of choice for most Americans for nearly a century, but the beverage has been fielding increasing competition from cannabis in recent years. With 24 states legalizing recreational cannabis so far, tens of millions of Americans now have access to legal cannabis. Several more states are considering cannabis reform and will most likely legalize the drug over the decade, increasing access to marijuana to even more Americans.

TD Cowen’s Cannabis Beats Booze report notes that the cannabis category will gain 19 million past-month consumers over the next five years while the alcohol category will lose two million. Lead of the analysis team Vivien Azer says the report adds to a growing body of market research that has consistently pointed to cannabis as a disclocator to alcohol sales. She said the team was surprised to see an “even greater underperformance” in the alcohol category in states with legal cannabis markets.

Although alcohol sales are still far ahead of cannabis sales, analysts say the beverage faces a risk of decline as an increasing number of consumers, especially younger people, are substituting alcohol with alternatives such as cannabis. Prior studies have found that younger populations are drinking less alcohol and using substitutes such as cannabis and psychedelics.

The report estimated that states such as Ohio and Minnesota, which recently legalized recreational cannabis but are yet to implement cannabis laws, could bring in an additional $37 billion in sales in 2027.

Alcohol companies may have little trouble navigating the evolving customer trends in the short-term, but certain brands likely face “competitive challenges” in the medium- and long-term.

TD Cowen says alcohol would keep underperforming in states with legal cannabis markets with beer being the most at-risk beverage. On average, TD Cowen notes, the number of drinks taken on given occasions is lower in legal cannabis states.

Despite the impact cannabis legalization seems to have had on alcohol consumption in legal states, Azer doesn’t see alcohol companies entering the marijuana market until there is meaningful administrative or legislative regulatory change at the federal level.

As more people opt for marijuana in lieu of alcohol, cannabis product demand will increase, and ancillary entities such as Innovative Industrial Properties Inc. (NYSE: IIPR) could also see their businesses grow as a result of this boom.

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