Legalized recreational marijuana may spell bad news for the alcohol industry but not tobacco


The recent wave of recreational cannabis legalization across the U.S. could generate $22 billion in sales per year, but not everyone is happy about it.

New research to be published in an upcoming edition of the INFORMS journal Marketing Science, titled, “Asymmetric Effects of Recreational Cannabis Legalization,” shows the alcohol industry could be impacted when the substance is legalized.

“It appears the alcohol industry has a valid reason to be concerned about legal marijuana and may need creative strategies to avoid market decline if it passes,” said Pengyuan Wang, an assistant professor in the Terry College of Business at the University of Georgia.

The study shows online searches for alcohol saw a drop of nearly 11%, but tobacco products were searched online nearly 8% more often.

The U.S. alcohol and tobacco industries are worth a combined $300 billion.

They are typically avid opponents of marijuana legalization legislation, but this research suggests, “tobacco companies may need to reexamine their presumption, and that anti-cannabis legalization is not to the best of their interest,” said Wang.

The research by Wang and co-author Guiyang Xiong of Syracuse University looked at anonymous data from 28 million online searches and 120 million ad impressions from a leading U.S.-based web portal from January 2014 to April 2017.

This shows a marijuana leaf

The study shows online searches for alcohol saw a drop of nearly 11%, but tobacco products were searched online nearly 8% more often. Image is in the public domain.

The study also found the legalization of recreational marijuana increases online searches by adults by 17%.

There is actually a decrease in searches done by those age 19 years and younger after the substance is legalized.

“Contrary to widely held public concern after recreational cannabis is legalized, teenagers appear to lose interest, rather than gain interest,” added Wang.

“Policymakers only concerned with an uptick in teen users, may want to rethink their stance.”

The Correlation Between Marijuana and Tobacco Use

Regardless of where you stand on the issue, a major drawback of using marijuana use seems to be higher rates of cigarette smoking, according to a recent study published in the Journal of Clinical Psychiatry

Researchers from Columbia University’s Mailman School of Public Health and City University of New York analyzed responses on cannabis use and smoking status from almost 35,000 people who participated in the National Epidemiological Survey on Alcohol and Related Conditions between 2001-2002 and 2004-2005.

Results found a disproportionate number of marijuana users also use tobacco and that it seems to trigger non-smokers to begin smoking and former smokers to relapse.

Current smokers were less likely to quit. 

“This is not an ideal public health trend,” Kaminetsky says.

“Even though cigarette use was declining over the last couple of decades, it may rise again, in tandem with marijuana use.”

University of Washington reports some evidence that co-using cannabis and tobacco can increase the severity of respiratory issues, toxic exposure and memory loss more so than just smoking marijuana.

And it’s especially dangerous to combine cannabis and tobacco into one joint, as some people do to experience a cannabis and nicotine high simultaneously.   

“If you have a condition that qualifies you for medical marijuana, work with your doctor to help prevent it from becoming as a gateway to tobacco,” says Kaminetsky. 

Media Contacts: 
Ashley Smith – INFORMS
Image Source:
The image is in the public domain.

Original Research: The study will appear in Marketing Science.


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