How Does Marijuana Really Affect Liquor Sales?
Aspen, CO, made international headlines last week after marijuana sales in the region topped liquor sales. It’s believed to be the first time weed sales have topped alcohol sales since Colorado legalized weed in 2014. Since the early days of legalization, there’s been a lot of discussion about legal cannabis and how it affects the sale of alcohol. In this article, we take a closer look at the relationship between legalization and alcohol sales, the trends we see in legal states, and what we can expect for liquor sales in the future as more states plan to legalize.
Legal Weed = Lower Alcohol Sales, Study Finds
In 2017, Georgia State University took a closer at how cannabis affected the sale of alcohol in legal states. Researchers from GSU analyzed beer and wine sales in over 2000 US counties between 2006 and 2015 and compiled their results in this study. They used data from the Nielsen Retail Scanner database, made up of data collected by Nielsen at checkout counters and other electronic Points Of Sale (POS).
The researchers then analyzed and compared the data from areas with legal cannabis to those where the drug had not yet been legalized. They were also careful to adjust the data for demographic and economic factors that can influence alcohol consumption, such as gender, age, unemployment, and median household income.
Overall, the study found that alcohol consumption dropped by 15% in counties where cannabis could be obtained legally. It also found that alcohol sales in legal counties on state borders were 20% lower than in the counties across the border where weed wasn’t legal.
The authors of the study concluded that cannabis and alcohol can substitute one another in the market and that legalizing cannabis could mitigate some of the negative repercussions associated with alcohol consumption.
“Our findings clearly show that these two substances act as strong substitutes in the marketplace,” they wrote. “This implies that rather than exacerbating the consequences of alcohol consumption—such as an increase in addiction, car accidents or disease risk—legalizing cannabis may temper them.”
How Does Legalization Affect The Future Of Alcohol Sales/Consumption?
According to GSU’s study, it might seem reasonable to assume that alcohol sales will drop in states that legalize cannabis in the future. Unfortunately, it’s not that simple. For now, GSU’s study makes it clear that there is a strong relationship between cannabis and alcohol. How complex this relationship is, however, isn’t clear. It’s also important to note that the study has its limitations:
First of all, it only analyzed sales for beer and wine and therefore doesn’t completely represent the entire alcohol industry. Also, the study analyzed sales beginning very much in the “early days” of legalization (2006). As the legalization movement has grown, the systems in place used to govern and regulate legal cannabis have changed. After all, the system in place in California today is different than the one introduced in 1996 following Prop 215.
The study also only looked at sales from convenience and liquor stores and didn’t analyze sales at bars or other venues that might sell alcohol. This is a big deal, seeing that some states, like California for example, allow local jurisdictions to legalize on-premise cannabis consumption at “lounges.”
Finally, it is also important to realize that this isn’t the only study on this topic. A 2016 review on the effect of changing cannabis policies and their effect on alcohol produced mixed results: While there was evidence to show that legal cannabis can help lower liquor sales, there is also enough evidence to suggest the contrary.
For now, it’s still hard to come to concrete conclusions about legal weed and how it affects liquor sales, and more research is needed in order to better understand the complicated relationship between the 2 substances.
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