Tobacco’s New Threat: Legal Marijuana

The video discusses the resilience of the tobacco industry despite regulations and lawsuits. It highlights the emerging threat from the liberalization of marijuana laws in North America, which could significantly impact tobacco and alcohol industries. The potential growth of the marijuana market is explored, with predictions of legal sales increasing from $7 billion to $30 billion by 2021. The video also examines the substitution effect between marijuana, tobacco, and alcohol, and speculates on the tobacco industry's future actions once marijuana is legalized federally.

What evidence suggests a substitution effect between cigarettes and marijuana?

What factors might influence tobacco companies to enter the marijuana market?