Cannabis legalization would lead to lower beer sales, according to new study

The legalization of cannabis is leading to a decline in retail beer sales, according to new data published in the Journal of Drug and Alcohol Dependence.

The study, entitled Association Between the Legalization of Non-Medical Cannabis and Alcohol Sales: Quasi-Experimental Evidence from Canada, examined monthly data on alcohol sales in Canada from 2012 to 2020, two years after the legalization of cannabis use nationwide.

She studied the impact of cannabis legalization on beer and spirits sales. Her main findings suggest that the beer sales across Canada, but particularly in the country's four western provinces, fell by 2.8 % between legalization in October 2018 and February 2020.

Beer sales fell by 96 hectoliters per 100,000 people immediately after the legalization of adult use, and by an additional 4 hectoliters per 100,000 people each subsequent month, which amounts to an average monthly reduction of 136 hectoliters per 100,000 people.

By beer type, the sharpest declines were seen in sales of canned and draft beer, but there was no decline in sales of bottled beer.

Similarly, according to the study, legalization has not led to any change in spirits sales in Canada.

The study suggests that legalization may have led to a substitution effect, with individuals potentially switching from beer to cannabis, but it recommends further research in these areas, particularly taking into account the impact of the COVID-19 pandemic and the potential heterogeneity of effects across different demographic groups.

In a press release regarding these findings, the National Organization for the Reform of Marijuana Laws (NORML) suggested that data from the United States also show a decline in alcohol sales following the passage of laws liberalizing cannabis. This is highlighted in a meta-analysis.

Still in Canada, the legalization of medical cannabis had already been combined with a decline in alcohol sales, suggesting that this is a cyclical trend rather than the result of the legalization of recreational cannabis in Canada.