The ground is shifting under the beer industry – and marijuana is a reason Beer is the third most popular drink globally behind water and tea.  But in the US, is cannabis becoming a serious rival to beer? According to recent research from investment bank TD Cowen, U.S. cannabis sales reached $29 billion in 2023, up from approximately $10 billion just five years earlier. That figure now represents about 11 percent of the total U.S. alcohol market, up from just 4 percent in 2018. Cannabis sales are projected to reach $37 billion by 2027, driven by increased legalization and changing social attitudes.

TD Cowen, which covers alcohol and cannabis as part of their portfolio,  forecasts the number of monthly cannabis users will grow by 18 million in the next five years, while alcohol is expected to lose about 2 million regular consumers. They also forecast the number of monthly cannabis users will grow by 18 million in the next five years, while alcohol is expected to lose about 2 million regular consumers.

Independent reporting from the Financial Times supports this trend. In states where cannabis is legal, two-thirds of cannabis users reported drinking less alcohol, with beer the most affected category. A similar trend has been observed in Canada, where beer sales per capita dropped more than 2 percent annually following national legalization. Some alcohol industry analysts are sounding the alarm. A Forbes article earlier this month linked the underperformance of alcohol stocks to growing health-conscious behaviors and increased cannabis use, particularly among younger adults seeking alternatives to traditional drinking. Despite the shift in spending, beer remains a staple for many consumers. A recent analysis by YouGov and Google Trends reveals that Miller is the most popular beer in 30 states, including the Midwest and Southeast. Coors leads in eight states, including California, Texas, and Arizona, while Guinness is most searched in New Jersey, Georgia, and South Carolina.  Also, still maintaining strong sales are Budweiser, Bud Light, Blue Moon, and Corona, although each holds a smaller share of state-level popularity. This evolving consumer landscape suggests a long-term rebalancing of the alcohol and cannabis markets. Much of the shift is driven by younger Millennials and Gen Z, who increasingly prioritize wellness, moderation, and cannabis as a social alternative to alcohol. Industry watchers say beer companies may need to adjust—either by diversifying into cannabis-infused beverages or rethinking how they market to health-conscious consumers. As more states move toward legalization and public sentiment shifts, the once-clear lines between the cannabis and alcohol industries are beginning to blur. Whether beer can hold its ground or cannabis continues to climb remains to be seen—but the competition is clearly underway.

The Fresh Toast is a daily lifestyle platform with a side of cannabis. For more information, visit www.thefreshtoast.com.

The Fresh Toast