The Election Just Unleashed a New Hedonism Economy
Last week, voters in multiple states voted to legalize marijuana and sports gambling
Since the start of the Covid-19 lockdown, Americans have fallen hard for the sin industries — drinking harder, gambling more, and smoking more marijuana. But the election has made that streak clearer than ever: Five states — most of them red — legalized marijuana. Arizona, New Jersey, Mississippi, Montana, and South Dakota all passed pot measures, with all but Mississippi allowing recreational use. Oregon went even further, voting to allow the use of hallucinogenic psilocybin mushrooms for medical use.
And that’s not all. Three states also okayed various forms of online sports gambling. With approval by voters in Louisiana, Maryland, and South Dakota, online gambling stocks took off. DraftKings’ shares were up as much as 6.2%, and Penn National Gaming rose 6.1%. There was good reason: According to Morgan Stanley, online betting in the three states could be worth $537 million a year. And it will only mushroom from there.
No one knows to what degree the surge in consumer sin habits will stick once most people are vaccinated and out of lockdown. But for now, Americans are drinking 14% more than they did before Covid-19, according to a RAND study published in September. They are spending tens of millions more betting online on fantasy sports. In California, Gov. Gavin Newsom went so far as to declare pot merchandising an essential business during the pandemic.
For now, letting loose is going hand in hand with the locked down economy, but you can see people itching to make up for lost time once they leave quarantine. The combined trend lines of laxer state laws and pent-up consumers suggest people are prepared to take bigger social and personal risks.
The long-awaited return to normal — already a far-fetched conceit after the economic and social shifts catalyzed by this crisis — could look a lot less “normal” and a lot more impulsive. When the bars and casinos fully reopen — those that actually survive — expect to see lines down the block. And the already-burgeoning cannabis industry, feverishly gathering steam across the past decade, might have just gotten the kick-start it needs to go fully mainstream.