The opening of recreational marijuana dispensaries can help boost nearby businesses by increasing foot traffic, purchases and revenue, according to a new study.
Researchers from the City University of New York, Northern Illinois University and University of Miami examined cannabis market growth, credit and debit card purchases and socioeconomic and demographic data in Illinois from 2021 through 2024, finding that “recreational dispensary openings increase the number of customers at nearby establishments by approximately 6.82%, transactions by 8.01%, and revenue by 7.47%.”
The economic gains are largely seen through what researchers call the extensive margin (customer traffic) as opposed to the intensive margin (purchasing frequency). That is, while revenue per customer and per transaction was largely unaffected, the overall number of customers coming through the door and the overall amount of transactions did increase.
“Following a dispensary opening, nearby establishments exhibit increases in customers, transactions, and revenue.”
The study, published as a preprint by the Social Science Research Network (SSRN) ahead of potential publication in the journal Production and Operations Management, also found that not all businesses near a new marijuana dispensary see the same benefits—with food and beverage establishments as well as essential retailers seeing “significant gains” while non-essential retailers
Read full article on Marijuana Moment
