Marijuana and Alcohol Evidence Using Border Analysis and Retail Sales Data

We use retail scanner data on purchases of alcoholic beverages across US counties for 2006-2015to study the link between medical marijuana laws (MMLs) and alcohol consumption. To do thiswe first exploit differences in the timing of marijuana laws among states and find that they aresubstitutes. We show that unlike traditional national-level analysis, focusing on contiguous bordercounty-pairs provides unbiased estimates of the effect of MMLs on alcohol sales. Specifically,counties located in MML states reduced monthly alcohol sales by 12.4 percent. Results are robustto including placebo effective dates for MMLs in treated states