Recreational Marijuana Sales Might Not Be Hurting the Alcohol Industry After All
Recreational marijuana sales might not be having as large an impact on the alcohol industry as we previously thought.
A new study out Thursday, conducted by The Distilled Spirits Council, found that spirits sales in states that have legalized recreational marijuana have actually grown since that legalization.
For its report, it looked at state-level alcohol tax receipts and actual alcohol shipment data in three states: Colorado, Washington, and Oregon between 2014—when marijuana was legalized—and 2017. According to its analysis, per capita, spirits sales increased between 3.6% and 7.6% in those states since recreational marijuana legalization went into effect. Colorado is up 7.6%; Washington state is up 5.4%; and Oregon is up 3.6%, all on-par with the national average for the same time period, 5.4%.
“Since the legalization of marijuana has begun, we have not seen any decline in spirit consumption or spirits sales in the states where recreational marijuana has been legalized, despite a number of reports in the media to the contrary,” Chris Swonger, CEO of The Distilled Spirits Council tells Fortune.
The Council claims that the discrepancy comes in how the data is being collected. Initial reports relied on survey data, where respondents notoriously underreport the amount they consume. Others relied on retail scanner data, which it says only represents roughly 20% of spirit sales, in part because many states do not allow hard liquor to be sold in traditional retail stores. Liquor sales have also been growing, taking a bite out of beer sales in recent years and skewing the data further.
“If you’re excluding the beverage that’s growing and including the beverage that’s declining, then just by definition you’re going to show some kind of impact,” says Distilled Spirits Council chief economist David Ozgo. “Everybody pays an excise tax,” he says, making it a more reliable means of reporting the data.
In the three states, Ozgo says that per capita beer sales declined between 2.3% and 3.6%, consistent with the national trend in beer sales and not isolated to just those states that have legalized marijuana sales. Colorado is down 3.6%; Washington state is down 2.3%; and Oregon is down 3.6%.
For wine, the study shows mixed results. Colorado is up 3.2%; Washington state is down 3.1%; and Oregon is up 0.7%.
“The results that we’re seeing on Oregon, Washington, and Colorado are really very consistent with what we’ve seen nationwide,” says Ozgo. “Ultimately it shows that there has been no impact on spirits sales for the legalization of recreational marijuana.”