Changes in Alcohol and Tobacco Consumption in Response to Medical and Recreational Cannabis Legalization: Evidence from U.S. State Tax Receipt Data

35 Pages Posted: 26 Feb 2019

See all articles by Sirish Veligati

Sirish Veligati

Washington University in St. Louis - School of Medicine

Seth Howdeshell

Washington University in St. Louis - School of Medicine

Sara Beeler-Stinn

Washington University in St. Louis - Brown School

Deepak Lingam

Washington University in St. Louis - School of Medicine

Phylicia Allen

Washington University in St. Louis - Brown School

Li-Shiun Chen

Washington University in St. Louis

Richard Grucza

Washington University in St. Louis - Department of Psychiatry

Date Written: February 19, 2019

Abstract

Background: Whether medical or recreational cannabis legalization has impacts on alcohol or cigarette consumption is a key question as cannabis policy evolves, given the adverse health effects of these substances. However, relatively little research has examined this question. The objective of this study was to examine whether medical or recreational cannabis legalization was associated with any change in state-level alcohol or cigarette consumption.

Methods: Dependent variables included state-level aggregate consumption of alcohol and cigarettes from all 50 states, estimated from state tax receipts. Independent variables included indicators for medical and recreational legalization policies. Three different types of indicators were separately used to model medical cannabis policies. Indicators for the primary model were based on the presence of active medical cannabis dispensaries. Secondary models used indicators based on either the presence of a more liberal medical cannabis policy (“non-medicalized”) or the presence of any medical cannabis policy. Difference-in-difference regression models were applied to estimate associations for each type of policy.

Results: Primary models found no statistically significant associations between medical or recreational cannabis legalization policies and either alcohol or cigarette consumption. In a secondary model, both medical and recreational policies were associated with significantly decreased cigarette consumption compared to states with no medical cannabis policy. However, post-hoc analyses demonstrated that these reductions were apparent at least two years prior to policy adoption, indicating that they likely result from other time-varying characteristics of legalization states, and are not direct effects of the cannabis policy. Estimates were sensitive to inclusion of state-level covariates, such as demographics and other policy variables, and evidence for differential trends in tobacco consumption were apparent.

Conclusion: We found no evidence of a causal association between medical or recreational cannabis legalization and changes in either alcohol or cigarette consumption.  

Keywords: cannabis, marijuana, tobacco, alcohol, policy, substitution, complementarity

JEL Classification: I12, I18, I14

Suggested Citation

Veligati, Sirish and Howdeshell, Seth and Beeler-Stinn, Sara and Lingam, Deepak and Allen, Phylicia and Chen, Li-Shiun and Grucza, Richard, Changes in Alcohol and Tobacco Consumption in Response to Medical and Recreational Cannabis Legalization: Evidence from U.S. State Tax Receipt Data (February 19, 2019). Available at SSRN: https://ssrn.com/abstract=3337354 or http://dx.doi.org/10.2139/ssrn.3337354

Sirish Veligati

Washington University in St. Louis - School of Medicine ( email )

St. Louis, MO
United States

Seth Howdeshell

Washington University in St. Louis - School of Medicine ( email )

St. Louis, MO
United States

Sara Beeler-Stinn

Washington University in St. Louis - Brown School ( email )

One Brookings Drive
Campus Box 1208
Saint Louis, MO MO 63130-4899
United States

Deepak Lingam

Washington University in St. Louis - School of Medicine ( email )

St. Louis, MO
United States

Phylicia Allen

Washington University in St. Louis - Brown School ( email )

One Brookings Drive
Campus Box 1208
Saint Louis, MO MO 63130-4899
United States

Li-Shiun Chen

Washington University in St. Louis

One Brookings Drive
Campus Box 1208
Saint Louis, MO MO 63130-4899
United States

Richard Grucza (Contact Author)

Washington University in St. Louis - Department of Psychiatry ( email )

660 S. Euclid Avenue
St. Louis, MO 63110
United States

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