Binge drinking across the United States is at an all time high. Yet, a new report from the Wall Street investment firm Cowen & Company shows that this dangerous alcoholic behavior is on the decline in states that have legalized the leaf in a manner similar to alcohol.
It was just a month ago that the Centers for Disease Control and Prevention (CDC) published new data suggesting that more Americans are now engaging in regular binge drinking. What was once considered a foolish exploit of College students has now apparently infiltrated citizens from every demographic and all walks of life.
The CDC found that Americans sucked down 17 billion alcoholic beverages in 2015. By definition, the term “binge drinking,” is five or more drinks for men, and four or more for women in a span of around two hours. Thirty-seven million adults (about 1 in 6 people) engage in this activity at least once a week, the report finds.
But the investment analysts at Cowen published a document earlier this week that provides a little hope for an America headed for cirrhosis of the liver. It seems that binge drinking is on the decline in states that have legal marijuana laws on the books. More specifically, it is those states like Colorado and Washington, some of the first U.S. jurisdictions to legalize for recreational use, where binge drinking is now less prominent.
“In legal adult use cannabis states,” the analysts wrote, “the number binge drinking sessions per month (for states legal through 2016) was -9% below the national average.”
What’s more is legal marijuana states, where adults 21 and older can walk into a dispensary and purchase a variety of cannabis products, experienced 13 percent less binge drinking than areas of prohibition. The writing is on the wall – people with legal access to recreational marijuana are opting to spend either all or a portion of their booze budget on a substance that has been deemed “a safer alternative.”
Marijuana may never run the booze business out on a rail, Cowen says, but there are some interesting dynamics that could throw a wrench in the gears of this inebriation leader.
“We have consistently argued that cannabis and alcohol are substitute social lubricants,” the report reads. “To be sure, we do not dispute that alcohol will continue to be quite popular in the U.S. (generating over $210B in annual retail sales today). We are, however, focused on the marginal alcohol unit, which given the cannabis category’s much smaller size, creates a sizable opportunity for the cannabis industry.”
As more states move into legalization, the report says, making mention of Michigan and Illinois as being the two most likely, the firm believes binge drinking rates will drop even more. This is mostly due to the fact that cannabis keeps gaining popularity and beer sales continue to decline.
As it stands, those states without recreational marijuana laws are experiencing an increase in binge drinking. “Non-cannabis states averaged 7.4 drinks per binge, ~12% higher than the 6.6 drinks per binge seen in adult use cannabis states,” the report reads.
In addition, the report also finds that Cowen’s previous prediction over the size of the national cannabis market was low. In the past, the firm estimated that if the federal government ended prohibition today, the cannabis industry would be worth $50 billion by 2026. Cowen now says the industry has already hit that mark. It now expects the U.S. cannabis market to grow to around $75 billion within the next 12 years.