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Cannabis Legalization Could See Reduction In Beer Sales, New Research Suggests

Cannabis legalization leads to a reduction in the retail sales of beer, according to new data published in the journal of Drug and Alcohol Dependence.

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

It explored the impact of cannabis legalization on the sales of both beer and spirits. Its main findings suggested that beer sales across Canada, but particularly in the country’s four Western provinces, dropped by 2.8% between legalization in October 2018 and February 2020.

Beer sales fell by 96 hectoliters per 100,000 people immediately after adult-use legalization, and by a further 4 hectoliters per 100,000 people in each following month, equalling an average monthly reduction of 136 hectoliters per 100,000 person.

By beer type, the declines were most pronounced in the sales of canned and kegged beer, but there was no reduction in sales of bottled beer.

Similarly, legalization was associated with no change in the sales of spirits in Canada, according to the study.

The study suggests that the legalization might have led to a substitution effect, with individuals potentially shifting from beer to cannabis, but it recommended further research in these areas, especially considering the impact of the COVID-19 pandemic and the potential heterogeneity in the effects across different demographic groups.

In a press release discussing the findings, the National Organization for the Reform of Marijuana Laws (NORML) suggested that data from the United States similarly shows dips in alcohol sales following the enactment of cannabis liberalisation laws.

This was emphasised in a meta-analysis of the applicable literature from 2020, 30 studies found evidence of substitution, while 17 found evidence of complementarity; a further 14 studies did not find evidence for either, and four found evidence for both.

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