Legalized Cannabis Sales Cause Drop in Alcohol Sales

A new study conducted by researchers at the University of Connecticut and Georgia State University revealed that medical cannabis laws resulted in a 15% decrease in alcohol sales, a trend observed in several states.

The researchers analyzed monthly alcohol sales from 2006-2015. Data was obtained from various retail operations including convenience stores, groceries, and drug stores using the Nielsen Retail Scanner database made up of sales data from 90 retail outlets nationwide. The study’s authors said that using Nielsen data was preferred to using survey data, since the latter leads to less accurate consumption rates. The study also took into account factors that may have an impact on alcohol consumption such as age, race, and income.

One of the study’s objectives was to find out of legalizing medical cannabis made it easier for some consumers to replace booze for cannabis, instead of these substances complementing each other.

“In economics, however, the overall impression, true or not, is that these two substances substitute each other, while in public health there is no strong perception on the link,” says the study.

Alcohol sales figures from 2016 shows that the Big Alcohol industry took a hit in consumption with a 1.3% drop. However, figures from the last 5 years combined show a reduction by an average of just 0.3% annually. Experts think that the decline in beer consumption as well as other reasons, is due to medical cannabis legalization.

“States legalizing medical marijuana use experience significant decrease in the aggregate sales of alcohol, beer, and wine. Moreover, the effects are not short lived, with significant reductions observed up to 24 months after the passage of the law.”

This is not surprising considering that alcohol companies have been aggressively opposing legalization campaigns, feeling its effects on their pockets.

The study also looked at alcohol sales in states with MMJ laws and compared it with sales in states that didn’t, taking into consideration the time before and after changes in regulations.

“We find that marijuana and alcohol are strong substitutes for each other,” the study concluded. “Counties located in medical marijuana states reduced monthly alcohol sales by 15 percent after the introduction of medical marijuana laws.”

If the study’s findings are accurate, Big Alcohol can expect to take an even bigger hit when more states legalize adult recreational use of cannabis. With the current MMJ laws, only patients with a doctor’s recommendation can access cannabis, which makes up a small percentage of the population. But with full recreational legalization, such as what is happening now in Colorado as well as 7 other states, anyone can buy cannabis whenever they please.

Although not all studies conclude that cannabis availability will result in a decline in alcohol consumption, there is significant evidence that points to this. A 2016 analysis looking at 39 reports on this topic revealed that there were 16 studies backing up this claim, proving that individuals do use cannabis as an alternative to booze. On the other hand, there were 10 studies suggesting cannabis availability actually led to an increase in alcohol use.

Alcohol is easily the most widely abused legal “drug” if you would call it that. Booze has much higher addiction rates, is responsible for the deaths of almost 90,000 people annually, more likely to cause car accidents, and is also linked to aggressive behavior and violence.

Meanwhile, cannabis is a proven life-saver with zero cases of overdose.

Some alcohol companies have taken a “if you can’t beat them, join them” approach to this reality. Constellation Brands, the company that brought you Corona Beer, Robert Mondavi Wines, and Casa Noble Tequila, have considered cannabis-infused drinks. “We’re looking at it,” said Constellation CEO Rob Sands. “There are going to be alcoholic beverages that will also contain cannabis.”

People are now spending their money on weed at a similar rate to alcohol states with legalization, especially among the younger generation. The shifting landscape is digging into the profits of the major brewers and craft brewers alike. MilllerCoors saw a 4.4 percent decline in sales of Coors Light over the past two years in Colorado, Washington and Oregon, where marijuana is legal for recreation use. Anheuser Busch-InBev saw a similar drop in sales of Bud Light in those three states, while sales for the company’s flagship beers, Coors and Budweiser, experienced a 2.4 percent drop, reports Time The drop in sales comes as marijuana consumers are buying pot at a similar rate to alcohol. The average adult in the U.S. spends roughly $645 on alcohol, while the average pot consumer spends roughly $640 on marijuana each year, reports MarketWatch.