The munchies: Marijuana legalization and food sales in Washington

This paper uses the differential timing and varying degree of recreational marijuana access across Washington counties to estimate the relationship between recreational marijuana sales and food sales. Using panel event study design methods over a period that covers the emergence of Washington's retail marijuana industry, we find a statistically significant increase in taxable food sales without evidence of an increase in or substitution away from other food categories. Specifically, the introduction of recreational marijuana sales increases per capita taxable food sales by 5% to 6% and a 1% increase in marijuana sales increases per capita taxable food sales by 0.018%. These findings imply there may be additional tax revenue and health costs that need to be included in the recreational marijuana debate.