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Will the potential legalization of marijuana put a dent in Wisconsin’s thriving alcohol industry?

Wisconsin is widely known for two things — cheese and beer. Alcohol alone brings in an annual $10 billion to the state’s economy. However, after last year’s referendum during the midterm elections, marijuana might cut into its profits, possibly in a big way.

If Wisconsin chooses to legalize the drug in the next few years, Wisconsinites can expect some severe head-butting between bars and dispensaries.

History of Wisconsin Alcohol

Wisconsin has an intricate history of booze brewing. Beginning in the 1830s, almost every community had an operating brewery, thanks to their German roots. According to the Wisconsin Historic Society, “Breweries were as much a part of Wisconsin communities as churches and schools.”

Its citizens battled the temperance movement and Prohibition to keep tavern doors open and beer flowing. While other states moved to ban alcohol altogether, Wisconsin tried to instead remove drunkards from its streets.

But during the 1920s, the breweries had no choice but to stop, switching to soda and dairy products, or they’d close forever. It wasn’t until the end of the Prohibition era that the alcohol industry blossomed, earning some companies international fame for their delectable beverages.

The Wisconsin alcohol industry offers more than 69,000 jobs in the state and almost $3 billion in wages and benefits. It also contributes a huge chunk of annual taxes at $1.25 billion in personal and business and $358 million in consumption taxes.

While the benefits of the Wisconsin alcohol industry are hard to precisely quantify, the drinking culture brings an entire state together. It’s so ingrained within the state that even their baseball team is called the “Brewers.”

History of Wisconsin Marijuana

While it’s definitely not this way now, Wisconsin was once the leading hemp grower in the United States. Beginning in 1908, business boomed in the ’20s as Prohibition diminished alcohol sales. But after WWII, the government stopped purchasing hemp and the drug culture led to its historic ban in the Controlled Substance Act of 1970. This made marijuana a Schedule I drug, joining both heroin and meth as a dangerous substance with severe consequences.

We now know that it’s illegal more because of a history of racial discrimination than its actual effects; marijuana is relatively harmless next to other Schedule I drugs. While marijuana is still banned in most states, Wisconsin representatives like Melissa Sargent are trying to legalize marijuana as both a medical and recreational drug, claiming results that could actually improve Wisconsin society.

The Pros and Cons

According to Sargent, her Assembly Bill 482 could reduce racial arrest disparities and help reform institutional racism within the legal system. With fewer arrests, taxpayers save money that they’d otherwise spend on possession charges. With dispensary revenue, marijuana could drastically boost the state’s economy.

However, there are potential hazards. After its legalization in Colorado, Denver saw an increase in organized crime and “pirate grows” made illegal shipments across the nation. Highway seizures swelled across its neighboring states, including Iowa, Minnesota and Wisconsin.

There’s also a reoccurring problem with accidental consumption of edibles, especially with minors. Colorado tried to address the problem by identifying edibles on the packaging and making less kid-friendly forms (i.e. gummy bears), but it’s still an issue that needs resolving.

A final hazard to marijuana is its lack of regulation. Because it’s federally illegal, government bodies like the FDA cannot set safety standards for weed products and states that have legalized it are dubbed “the wild west.” But with this concern in mind, Sargent is hoping to model marijuana legislation after the state’s alcohol laws, which would put the drugs on an equal playing field.

Will Weed Cut Into Alcohol Profits?

When that day comes, who knows which will take the upper hand, or if the “upper hand” will exist. But current evidence shows that weed may outweigh its competitor.  According to Forbes, states with medical marijuana laws have seen a 15% drop in alcohol sales, saying, “Introducing (overall) legal marijuana where alcohol consumption is legal may very well result in a negative effect on alcohol sales.”

Marijuana and alcohol pose as strong substitutes for each other and if marijuana were legalized, some might use it to participate in activities they can’t otherwise do with booze.

Alcohol dulls the senses more than marijuana, almost handicapping those who choose to drink in some cases. Operating vehicles is especially illegal when under the influence of alcohol, but there are less strict laws when it comes to marijuana.

Although those intoxicated with weed are still driving “under the influence,” this is a draw to people who support its legalization. This does pose more problems for legalizing the drug, but if Sargent’s bill is initiated, the drug will have the same criteria as alcohol, making it illegal to drive under its influence and limiting consumption to those who are 21 or older.

Then, of course, there’s the diminishing criminal aspect. People are more likely to smoke if it’s legal, possibly more than they drink. It’s less of a risk both with law enforcement and personal health, as the effects of long-term smoking are less than long-term drinking. While research is murky, “more than 30,700 Americans died from alcohol-induced causes in 2014. There have been zero documented deaths from marijuana use alone.” For these reasons, marijuana might be the consumer’s choice over alcohol.

However, Wisconsin still has a prominent drinking culture, which means bars aren’t closing anytime soon, despite the arrival of weed. Alcohol has been a social activity for centuries, and Wisconsin has perfected its wide array of opportunities and activities to partake in drinking. Marijuana legalization has also been pretty gradual, so even if Sargent’s bill goes through, it’s likely to be restricted in public places.

For this reason, people will seek out bars and restaurants for the social aspect of drinking. So even if weed is legalized, it’s possible that it will have little to no effect on the alcohol industry. Wisconsin might only increase its revenue and reduce crime with the legalization of marijuana.

Historically, marijuana and alcohol have had success in Wisconsin, but if they’re both placed on an even playing field, it will be interesting to see what effects it will have on recreation, crime and the economy.

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