Looks like legalizing cannabis isn’t just a boom to the tax coffers. It turns out that cannabis tourism is a boom in the hospitality industry, boosting hotel bookings in legal states, at least according to a study published in the Journal of Regional Policy and Analysis.
The study, “(Pot)Heads in Beds: The Effect of Marijuana Legalization on Hotel Occupancy in Colorado and Washington, was published in the first week of May. The data is interesting, too. For example, the study reveals that after Colorado legalized cannabis sales, the state’s number of hotel room rentals jumped. Washington State also had increases in tourism after they legalized marijuana, although the numbers were more modest than those in Colorado.
The same…but different
Researchers believe that the difference between the numbers in Colorado compared to Washington may be the result of Colorado’s more central location for American tourists— ”Denver’s airport is a major hub for United Airlines,” the paper notes. Another possibility? Washington’s proximity to British Columbia. Researchers noted that while recreational marijuana was illegal in Canada while the study was being conducted, British Columbia “has a strong reputation for growing marijuana and a laid back attitude toward marijuana consumption.” While recreational use of cannabis was illegal in Canada during the study, it is now legal nationally. Legal, adult-use sales started in 2018.
The study compared hotel room rentals in Colorado and Washington to states that weren’t proposing any marijuana legalization over a period of time — from 2011 through 2015. The data indicated that cannabis legalization corresponded to an uptick in tourists, and similarly, an increase in hotel revenue — even more so after retail sales started. Both Colorado and Washington allowed for personal marijuana possession before legal sales kicked off, which had a positive effect on hotel bookings. Colorado’s hotel bookings increased by 2.5 percent when possession was allowed and increased 6 percent when retail stores opened up. Washington’s stats were about half of that, with bookings increasing by about 1 percent after possession was allowed, and 3.5 percent once retail stores opened.
Will it last?
While the study concludes that the legalization of marijuana resulted in a tourism boost in Colorado and Washington as prohibition ended in those states, it’s not clear how long the boom will last.
“While marijuana legalization increased tourism, especially in Colorado,” they write, “the benefit may wane as additional states including California, Michigan, and Illinois, legalize the possession and sale of marijuana.”
“It is easy to see the implications marijuana legalization might have for tourism,” the paper says, noting that “Amsterdam’s permissive legal tolerance of drugs (and other activities) attracts visitors from around the world, sometimes to the weariness of the Dutch public.”