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The 'munchies' effect: How cannabis legalization will effect QSR traffic

Will Colorado's legalization of marijuana increase traffic for the state's restaurants?

September 9, 2016 by Eli Portnoy — CEO, Sense360

The legalization of marijuana four years ago in Colorado has ushered in a new wave of cannabis and cannabis tourism-related business across the Mile High State. And in the midst of that flurry of new business, one intriguing question emerges related to the food service industry: What about the "munchies"?

You know, that renowned appetite-stimulating after-effect of cannabis consumption that more than a few users and scientific studies have documented, includingthis one from Johns Hopkins University School of Medicine researchers, who found, "Smoked active marijuana significantly increased total daily caloric intake by 40 percent … due to an increased consumption of snack foods."

Given that well-known side effect, it seems likely that Colorado's legalization of the drug in its many forms might also increase business for Colorado restaurants. But when Sense360 looked into this question, the foot traffic numbers — perhaps surprisingly — showed no such effect.

 "Smoked active marijuana significantly increased total daily caloric intake by 40 percent … due to an increased consumption of snack foods."

By compiling information on more than 150 million consumer trips to QSRs over the last two months, then comparing the level of activity between those trips in Colorado with those in two other Midwestern states where marijuana isn't legal, Sense360 found that QSR traffic wasn't different in states without legalized marijuana, compared to QSR traffic in one that is — Colorado — during the same time period. 

In all three states, McDonald's leads all other QSR brands in market share, with roughly 15 to 20 percent of the total QSR market. Looking at average visits to McDonald's per hour in all three states, the time distribution is nearly identical. For instance, the three following graphs show the average number of visits per hour to McDonald's locations in Colorado (1), Minnesota (2) and Wisconsin (3), as indicated:

Based on these time graphs, there is no perceptible relative increase in consumption in Colorado during the afternoon or evening, when it might be assumed that most marijuana consumption occurs. Similarly, the number of average daily visits to McDonald's in Colorado mirrors that in Minnesota and Wisconsin.

As you can see in the next set of graphs (1- Colorado, 2- Minnesota, 3- Wisconsin), peak foot traffic occurs on Fridays and Saturdays for the chain's stores in all three states. Likewise, the lowest level of foot traffic occurs at the start of the work week. But there's no significant difference in Colorado's numbers. Additionally, there appears to be no perceptible relative increase in McDonald's foot traffic in Colorado on the weekends when you might assume that most recreational marijuana consumption occurs. The numbers remain fairly constant in all three states.

But wait, maybe marijuana-users just prefer their after-indulgence snacks at somewhere other than McDonald's. The analysis also showed that these trends hold up across other QSR brands for the three states. For instance, data from Taco Bell — which holds roughly 6 percent of the QSR market in all three states and markets itself as a late-night restaurant — proved nearly identical in the average number of visits per hour across all three states.

In Taco Bell's case, peak foot traffic occurred at noon over the two months studied, with a second traffic surge from 5 to 6 p.m. The brand also saw no relative increase in foot traffic on Fridays and Saturdays when compared with Minnesota and Wisconsin. 

Although Colorado has certainly "blazed" a trail by pioneering legalized marijuana, QSRs shouldn't rely on the munchies to increase traffic. 

About Eli Portnoy

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