Is Cannabis Taking Alcohol Market Share?


Americans have many obsessions—social media, sneakers, television, gambling, video games, alcohol, working out, food, cannabis, etc. But should some of these industries be concerned that cannabis may take away their market share? Possibly, according to a 2017 US study by three college researchers. 

Michele Baggio and Sungoh Kwon, both from the University of Connecticut, along with Alberto Chong from Andrew Young School of Policy Studies, Department of Economics; Institute for Corruption Studies decided to study if states with access to legal medicinal cannabis impacted alcohol sales. 

The study examined states who legally sell medicinal cannabis. They wanted to study the potential of its impact on alcohol consumption and sales. The researchers discovered that alcohol sales and consumption within two years of medicinal cannabis becoming legal, experienced a 13% drop in alcohol sales, specifically beer and wine.

But, in this study, researchers were relatively narrow in scope, only studying states where medicinal cannabis was legal. In states where recreational use is legal, cannabis is more widely available to anyone of legal age; how significant would the impact be on alcohol sales? Based on their study, it could be game-changing, but nobody can say for sure at this point.

At least one study in Canada has estimated that recreational cannabis may not impact alcohol sales at the levels researchers in the US found. The Canadian study showed that legalized cannabis impacted alcohol sales by less than 1%. However, another Canadian study of cannabis consumption habits in the US showed that beer lost the highest percentage of market share after legalization. 

And while the study of Colorado, Oregon, and Washington's legal cannabis market suggests that people tend to cut back on beer and wine consumption, the same study showed that Canadians who use cannabis rarely, if ever, mix cannabis and alcohol. The study concludes that the more people use cannabis, the less they will drink alcohol.

But whether alcohol sales drop less than 1% or 13% or considerably more, the alcohol industry has typically battled against cannabis legalization because it believes cannabis will infringe on its market share. With deep pockets and plenty of lobbyists in their corner, they'll continue to rail against the budding cannabis industry. Alcohol stands to lose a lot of money if people turn to cannabis over a glass of wine or can of beer.

Legalization continues to sweep across North America, and at least a few alcohol companies recognize the potential in combining forces. If you can't beat them, join them!

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