According to a new report, marijuana is having a substantial impact on the alcohol industry, and a majority of millenials prefer cannabis over alcohol.

OutCo, a Southern California-based cannabis company, has partnered with Monocle Research to conduct a new report on the growing use of cannabis in California and its impact on the alcohol industry. The study revealed a sea of change is coming with many California millennials saying no to alcohol and yes to marijuana. Research further indicates this shift will continue to rise which could have a significant impact on the alcohol industry.

Millennials will be more open to diversity in their consumption of recreational substances than older generations, with more than 50% of them substituting cannabis for alcohol altogether. The study further shows that one in five Generation Xers will be substituting marijuana for alcohol, as will 8% of baby boomers.

“We found that for millennials, the choice between the two main recreational substances, alcohol and tobacco, has always been an easy one. Growing up with anti-tobacco messaging, the smoking rate for 18-29 year olds in the U.S. has dropped by 22% over the past decade, leaving alcohol as the substance of choice,” said OutCo CEO, Lincoln Fish. “But we are already seeing a decrease in alcohol sales, which means that cannabis is poised to be the new recreational substance of choice for many millennials and beyond.”

Report findings include:

1. Beer was the most popular substitution, with 34% of millennials saying they will opt for cannabis over beer.

2. 18% of millennials will substitute cannabis for wine.

3. 14% of the millennial population will substitute cannabis for spirits.

Some of the most interesting findings came from the users’ explanations as to why they were choosing to replace alcohol with marijuana. Most responses were clustered around a few particular themes, which included perception of safety, cost, and health.

In regards to safety, many expressed the fear of making poor decisions when consuming alcohol, which included driving over the legal limit. Cost also came into play, with many stating that their overall spend on alcohol outstrips that of high quality cannabis. Finally, health was stated as a factor when substituting marijuana for alcohol. Participants shared that the effects of a hangover from alcohol lasted the entire next day, while high volumes of cannabis usage had no noticeable lasting effects; thereby making them feel healthier and more active.

For the full report, click here.