Consider the immediate sales drop at alcohol-only stores—this could suggest some consumers switched from alcohol to cannabis right after legalization.
Michael J. Armstrong Brock University via The Conversation
It was not clear how legalizing cannabis would affect the consumption of alcohol before Canada’s October 2018 recreational marijuana law. Was there a change in beverage alcohol consumption after the legalization of cannabis?
If people substituted cannabis for alcohol, drinking could decrease. This switch could potentially reduce the harms associated with alcohol. Economically, any cannabis gains would come at the cost of alcohol manufacturers.
Conversely, drinking might You can also increase your income by increasing the number of employees. It would be better if cannabis and alcohol were used together. It could lead to higher alcohol revenues and profits for government but also increased risks.
As a result of this unpredictability, many businesses have diversified. A cannabis-growing company was bought by an alcohol manufacturer, and a cannabis business acquired several breweries.
The research conducted in the United States on the subject of alcohol use and cannabis is not conclusive. Others report an increase in alcohol usage or no change at all. These contradictory conclusions could reflect the complicated legal system in the United States where cannabis is still illegal even when it’s allowed in some states.
Some studies in Canada indicate that alcohol consumption decreased slightly when medical marijuana use increased. Similar decreases followed the legalization of recreational cannabis?
In order to answer this question, we studied Canada’s total alcohol sales with the help of health scientists Daniel Myran and Robert Talarico. Jennifer Xiao, Rachael McDonald-Spracklin, Rachael’s mother, also a researcher in health sciences, was also involved.
Total sales looked stable
Our research began by looking at the annual sales of alcohol from 2004 through 2022. Over that time period, sales of beers gradually declined while coolers and drinks continued to rise. This left the total amount of sales essentially unchanged.
The switch from beer to other drinks is evident. There were no visible effects of the legalization of cannabis in 2018.
Comparing the monthly sales of the 12 months prior to legalization with the 12 following was also done. The national sales averages for beer and liquor producers were included. The sales trend in either case did not change significantly from October 2018 to November 2018.
This research was designed to identify large-scale changes. For subtler changes, I concentrated on Nova Scotia.
Some liquor shops sell cannabis
Most provinces prohibited the sale of cannabis in liquor stores when Canada legalized it, to prevent alcohol-drinkers from being tempted into cannabis.
Nova Scotia did exactly the opposite. Nova Scotia’s state-owned liquor company became its main cannabis retailer. After the legalization of cannabis in October 2018, many provincial liquor shops continued to sell only alcohol. However, some started selling cannabis.
The uniqueness of the situation led me to examine sales data in this province. I concentrated on the 17-month period before legalization, and also 17-months after.
In October 2018, the total sales of alcohol for this corporation initially dropped, but then gradually grew again. The monthly average sales were about $500,000 lower than before legalization.
It was interesting to see the differences in the stores selling cannabis versus those that only sell alcohol. The sales of alcohol only stores immediately decreased. The average sales were $800,000.
The alcohol market has begun to grow at the cannabis sellers. The average monthly total sales between October 2018 and February 2020 was $300,000 higher than the previous levels.
Beer sales were higher than spirits and wines.
Interesting, the changes in alcohol-only store locations near stores that sell cannabis were similar to those of stores further away.
Switching products or stores
Although I cannot say for sure why sales were split, my data allows me to speculate.
Consider the immediate sales drop at alcohol-only stores—this could suggest some consumers switched from alcohol to cannabis right after legalization.
While some shoppers may simply have changed their shopping habits due to the non-availability of discounts at cannabis retailers, others might just be changing where they shop. In order to purchase both cannabis and alcohol, the consumers went to cannabis vendors instead of their local liquor-only retailers.
Cannabis sales are increasing, which could be a sign that people prefer to buy cannabis at licensed shops instead of from illegal dealers. These people went to these shops to purchase weed and also purchased alcohol.
Look ahead
So far, my research has concentrated on the first post-legalization phase from October 2018 until February 2020.
The next time I study cannabis retailing, it will be in a later period when the practice was perhaps more prevalent and influential.
COVID-19 will arrive in March 2020, so it’s going to be even more difficult. The pandemic affected alcohol sales, but not cannabis. The effects of cannabis on Canadians’ drinking patterns will be difficult to distinguish from those caused by the pandemic or their changing habits.
I’m guessing that the legalization of cannabis had a minimal impact in terms of short-term effects on current drinkers. The majority of Canadians did not suddenly switch to vaping or cannabis in place of vodka.
In the long term, however, it is possible that we will see gradual changes. The legal drinking age for cannabis is reaching its limit in Canada. Some individuals who had previously started drinking alcohol now may choose to consume cannabis in place of or along with it.
Currently, cannabis consumption is three times as common as alcohol. Time will tell whether this continues.
Michael J. Armstrong teaches operations research as an Associate Professor at Brock University.
The Conversation has republished this article under Creative Commons. You can read the original article.
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