For the first time in U.S. history, the number of people consuming cannabis daily or almost daily has overtaken those who drink alcohol with the same frequency, according to a new study published in the journal Society for the Study of Addiction.

This landmark shift has substantial implications for the cannabis market, as detailed by a few industry experts who will be speaking at the fall Benzinga Cannabis Capital Conference in Chicago this October.

Cannabis Consumption On The Rise

The study highlights a dramatic increase in cannabis use over the past three decades. Since 1992, the per capita rate of daily cannabis consumption in the U.S. has surged nearly fifteenfold.

By 2022, approximately 17.7 million people reported using marijuana daily or near-daily, compared to 14.7 million who reported the same frequency for alcohol use. This data was derived from the National Survey on Drug Use and Health, a federally funded survey considered a reliable source for self-reported substance use statistics in the country.

Industry Experts On Market Impact

Aaron Grey, managing director at Alliance Global Partners, emphasized the importance of this trend among younger adults.

"Our bigger takeaway is that the shift to cannabis [from alcohol] is greater for young adults — implying that this trend will continue for decades to come as younger adults age and continue their legacy consumption habits," Grey said.

"We believe large CPG operators in categories struggling for volume growth will turn to cannabis once federally permissible, in our view, as we have already seen in Canada — leaving operators with the ability to succeed in the market today well-positioned not only for institutional investors but also for strategic investments/acquisitions from these large CPG companies."

Jesse Redmond, head of cannabis at Water Tower Research, pointed out that a small percentage of consumers drive the majority of cannabis sales.

"The Pareto principle states that 80% of consequences come from 20% of actions. I've found in the cannabis industry that 10% of consumers use 90% of the cannabis — it is the daily consumer who drives revenue. The high amount of daily consumption should expand this ‘apex cannabis consumer' segment and drive more revenue for cannabis companies. Businesses should design loyalty programs that reward regular users."

Consumer Preferences and Business Strategies

Jamie Pearson, president of New Holland Group, shared her perspective on the impact.

"We will see more money and M&A activity enter the industry from the alcohol sector as they hedge lost market share. I predict we will also see more CPG companies looking for access points to the industry,” said Pearson.

“The most critical will be to focus on the growth of profitability rather than just growth for growth's sake. The more people use cannabis and grow accustomed to having it in their neighborhoods, the less powerful the stigma becomes. I expect legislation and reform efforts to continue as public knowledge and support grows."

Laurie Parfitt, founder and CEO of LKP Impact Consulting, believed the surge in daily cannabis use will lead to increased demand for diverse product offerings.

"The shift towards increased daily cannabis use is likely to have an impact on the cannabis market. First and foremost, we can expect a surge in demand across various product categories, particularly in consumables such as edibles and vapes, which tend to be popular for their ease of use and discretion. This uptick in daily usage could lead to greater retail sales and potentially higher profits for cannabis businesses."

Joseph Lustberg, CEO of Upwise Capital, expects higher daily use to push for more lenient regulations and broader legalization efforts. He emphasized the need for product innovation and robust marketing strategies to capitalize on this trend.

"To capitalize on this trend, businesses should focus on product innovation and quality. Creating unique, high-quality products that cater to various consumer preferences can set a brand apart. Additionally, investing in robust marketing strategies and consumer education will be crucial to attract and retain customers."

Regulatory and Public Perception Shifts

Will Bowden, founder and CEO of Grasshopper Farms, saw this shift as an opportunity to enhance education and transparency in the industry.

"This is an exciting time in which demand is literally creating job and business opportunities. This is also an excellent time to appreciate the amount of medicinal use and relief being provided, perhaps more directly. We really need to start helping each other with business plans, real SOPs, and market analysis. There is plenty of business for all who want to run a viable business."

Dan Ahrens, portfolio manager of AdvisorShares, noted the increasing acceptance and use of cannabis reflect a broader cultural shift.

"We're not surprised by the increase in cannabis use; we think this is a trend that will continue in the U.S. as more states allow for regulated, safe access to legal cannabis. Nearly 75% of Americans live in a state where marijuana is legal for either recreational or medical use, and we see that number as only growing larger. The more people learn about cannabis as a relatively safe alternative to alcohol or other substances, we expect greater normalization and increased use."

As daily cannabis consumption becomes more prevalent, the industry must adapt to changing consumer behaviors and regulatory landscapes, positioning itself for continued growth and acceptance. The insights from these experts at the upcoming Benzinga Cannabis Capital Conference in Chicago will be crucial for businesses managing this evolving market.

Cannabis rescheduling seems to be right around the corner. Want to understand what this means for the future of the industry? Hear directly for top executives, investors and policymakers at the 19th Benzinga Cannabis Capital Conference, coming to Chicago this Oct. 8-9. Get your tickets now before prices surge by following this link.

Photo: Benzinga