Marijuana Law, Policy & Reform

Editor: Douglas A. Berman
Moritz College of Law

Monday, April 18, 2022

"What Tax Revenues Should Ohioans Expect If Ohio Legalizes Adult-Use Cannabis?"

The title of this post is the title of this new report available via SSRN and produced by the Drug Enforcement and Policy Center and authored by Jana Hrdinova and Dexter Ridgway. Here is its abstract:

Advocates for cannabis reform in Ohio and in other states often stress the tax revenue that can be raised through legalization.  If a citizen-initiated statute currently under consideration in the Ohio General Assembly were to reach the ballot, Ohio voters are likely to hear from reform advocates about the potential tax revenue a new cannabis industry could bring to the Buckeye State.  The purpose of this policy paper is to provide an initial estimate of potential cannabis tax revenue in Ohio that is informed by tax revenue data and trends from a select group of other adult-use states.

Based on our analysis, we are using Michigan FY 2021 data on cannabis tax revenue as our focal point for Ohio cannabis tax revenue estimates given the demographic and tax structure similarities; we are assuming a conservative rate of diminishing retail sales growth through year five of an operational legal adult-use program; we are using state population figures as our basis for calculating per capita cannabis tax revenue rates; and we are modeling for three different Ohio pricing scenarios.  Given these assumptions, the potential annual tax revenue from adult-use cannabis in the state of Ohio ranges from $276 million in year five of an operational cannabis market to $374 million in year five of operations.

April 18, 2022 in Recreational Marijuana Data and Research, Recreational Marijuana State Laws and Reforms, Taxation information and issues | Permalink | Comments (0)

Wednesday, February 23, 2022

New Leafly report concludes "legal cannabis now supports 321,000 full-time American jobs"

Email-A1-ChartA_mobile-584x354-1The folks at Leafly have this notable new report seeking to address this basic question: "How many jobs are in America’s legal cannabis industry?" Here is part of the answer:

The 2022 Leafly Jobs Report found 428,059 full-time equivalent jobs supported by legal cannabis as of January 2022.  In the second year of the Covid-19 pandemic, America’s cannabis industry sold nearly $25 billion in products and created more than 107,000 new jobs — enough to fill the Rose Bowl and then some.

That’s a 33% increase in jobs in a single year.  And it marks the fifth year in a row of annual job growth greater than 27%. No other industry in America can match that.  Last year, America’s legal cannabis industry created more than 280 new jobs every day.  In 2021, someone was hired for a cannabis-supported job about every 2 minutes of the work day....

Those 428,059 jobs include direct cannabis jobs like cultivation and retail sales — what are often called “plant-touching jobs” — as well as indirect ancillary jobs that serve licensed companies or depend on legal cannabis sales. Ancillary jobs include work in accounting, human resources, legal affairs, regulatory compliance, security, maintenance, and construction.  Also included are indirect jobs in cannabis media, technology platforms, public relations, lobbying, non-cannabis product suppliers, and industry associations....

America now has three times as many cannabis workers as dentists.  Cannabis workers outnumber insurance salespeople. There are more people employed in the cannabis industry than there are hair stylists, barbers, and cosmetologists—combined....

While legal cannabis now supports 428,059 jobs, the total employment potential in a mature US legal cannabis market is approximately 1.5 million to 1.75 million workers.  The economic and employment potential for legal cannabis remains quite bright for many years to come.

February 23, 2022 in Employment and labor law issues, Medical Marijuana Data and Research, Recreational Marijuana Data and Research | Permalink | Comments (0)

Thursday, January 27, 2022

"Societal Costs and Outcomes of Medical and Recreational Marijuana Policies in the United States: A Systematic Review"

The title of this post is the title of this notable new research in the journal Medical Care Research and Review authored by Michael French, Julia Zukerberg, Tara Lewandowski, Katrina Piccolo and Karoline Mortensen.  Here is its abstract:

Significant support exists in the United States for legalization of marijuana/cannabis.  As of 2021, 36 states and four territories approved the legalization of medical cannabis via medical marijuana laws (MMLs), and 15 states and District of Columbia (DC) have adopted recreational marijuana laws (RMLs).  We performed structured and systematic searches of articles published from 2010 through September 2021.  We assess the literature pertaining to adolescent marijuana use; opioid use and opioid-related outcomes; alcohol use; tobacco use; illicit and other drug use; marijuana growing and cultivation; employment, earnings, and other workplace outcomes; academic achievement and performance; criminal activity; perceived harmfulness; traffic and road safety; and suicide and sexual activity.  Overall, 113 articles satisfied our inclusion criteria.  Except for opioids, studies on use of other substances (illicit drugs, tobacco, and alcohol) were inconclusive. MMLs and RMLs do not generate negative outcomes in the labor market, lead to greater criminal activity, or reduce traffic and road safety.

January 27, 2022 in Medical Marijuana Data and Research, Recreational Marijuana Data and Research | Permalink | Comments (0)

Thursday, January 6, 2022

MPP provides new accounting of "Cannabis Tax Revenue in States that Regulate Cannabis for Adult Use"

Taxes051816The Marijuana Policy Project has this notable new online report under the heading "Cannabis Tax Revenue in States that Regulate Cannabis for Adult Use."   The report provides a state-by-state accounting of public tax revenue data, and it sets up the discussion this way:

Legalizing cannabis for adults has been a wise investment.  Since 2014 when sales began in Colorado and Washington, legalization policies have provided states a new revenue stream to bolster budgets and fund important services and programs.  As of December 2021, states reported a combined total of $10.4 billion in tax revenue from legal, adult-use cannabis sales.  In addition to revenue generated for statewide budgets, cities and towns have also generated hundreds of thousands of dollars in new revenue from local adult-use cannabis taxes.

Eighteen states have laws that legalize, tax, and regulate cannabis for adults 21 and older (the 2020 voter-approved adult-use legalization law in South Dakota was overturned by the state’s Supreme Court in November 2021).  Eight of the laws were approved in 2020 or 2021, and in seven of those states, sales and tax collections have not yet begun.  This document reviews each state’s adult-use cannabis tax structure, population, and revenue from legalization.  These figures do not include medical cannabis tax revenue, application and licensing fees paid by cannabis businesses, additional income taxes generated by workers in the cannabis industry, or corporate taxes paid to the federal government.

The last line of this introduction highlights why this review in necessarily an under-reporting of state revenues generated by legalization regimes.

January 6, 2022 in Recreational Marijuana Data and Research, Taxation information and issues | Permalink | Comments (1)

Monday, January 3, 2022

"Cannabis decriminalization and racial disparity in arrests for cannabis possession"

The title of this post is the title of this encouraging new research in the January 2022 issue of the journal Social Science & Medicine.  This piece is authored by Christian Gunadi and Yuyan Shi, and here is its abstract:

Rationale

Minorities often bear the brunt of unequal enforcement of drug laws. In the U.S., Blacks have been disproportionately more likely to be arrested for cannabis possession than Whites despite a similar rate of cannabis use. Decriminalizing cannabis has been argued as a way to reduce racial disparity in cannabis possession arrests. To date, however, the empirical evidence to support this argument is almost non-existent.

Objectives

To examine whether cannabis decriminalization was associated with reduced racial disparity in arrests for cannabis possession between Blacks and Whites in the U.S.

Methods

Using FBI Uniform Crime Report data from 37 U.S. states, cannabis possession arrest rates were calculated separately for Blacks and Whites from 2000 to 2019.  A difference-in-differences framework was used to estimate the association between cannabis decriminalization and racial disparity in cannabis possession arrest rates (Blacks/Whites ratio) among adults and youths.

Results

Cannabis possession arrest rates declined over 70% among adults and over 40% among youths after the implementation of cannabis decriminalization in 11 states. Among adults, decriminalization was associated with a roughly 17% decrease in racial disparity in arrest rates between Blacks and Whites.  Among youths, arrest rates declined among both Blacks and Whites but there was no evidence for a change in racial disparity between Blacks and Whites following decriminalization.

Conclusions

Cannabis decriminalization was associated with substantially lower cannabis possession arrest rates among both adults and youths and among both Blacks and Whites.  It reduced racial disparity between Blacks and Whites among adults but not youths.  These findings suggested that cannabis decriminalization had its intended consequence of reducing arrests and may have potential to reduce racial disparity in arrests at least among adults.

January 3, 2022 in Criminal justice developments and reforms, Initiative reforms in states, Race, Gender and Class Issues, Recreational Marijuana Data and Research | Permalink | Comments (0)

Thursday, December 16, 2021

"The Effects of Marijuana Legalization in Colorado: More Neutral than Expected"

The title of this post is the title of this paper recently posted to SSRN and authored by Jesse Plaksa, a student at The Ohio State University Moritz College of Law.  (This paper is yet another in the on-going series of student papers supported by the Drug Enforcement and Policy Center.)   Here is this latest paper's abstract:  

In 2012, Colorado was among the first states to legalize marijuana for recreational use, coming only second to Washington by four days.  However, Colorado was the first state to begin selling recreationally.  Thus, interested parties immediately began looking to Colorado’s experiment to help determine what exactly happens when a state begins regulating marijuana like alcohol.  Any major policy change will have many wide-ranging effects.

This paper will examine a variety of those effects, including the effects on crime, use of other illicit drugs, policing, health, and economic effects.  The effects on crime are not clear because there are conflicting reports showing crime has gone down, but others show a neutral effect on crime.  Legalization does not seem to affect clearance rates of crimes, as proponents often argue it would.  It is not yet clear whether marijuana legalization lowers opioid overdose deaths, though researchers would expect that some opioid users would use marijuana instead. Additionally, legalization appears to have little to no effect on traffic accidents and fatalities.  Legalization also added a substantial amount of new jobs to Colorado’s economy and brings in substantial revenue with Colorado’s high tax rate on marijuana sales.

Marijuana is still federally illegal, being a schedule I drug along with heroin, but states have pushed forward with little to no interference from the federal government.  Colorado has paved the way by showing that legalization can, at the very least, bring in much-needed revenue via taxes.  By being aware of the possible effects of legalization, state lawmakers and citizens can be better informed to make decisions for their own states.  Additionally, the federal government can look to Colorado as an experiment that it can then learn from to better decide whether to make any changes at the federal level.  Given that Pew polls show around two thirds of Americans favor legalization, a close look at the consequences of such a policy is warranted.

December 16, 2021 in History of Marijuana Laws in the United States, Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research, Taxation information and issues | Permalink | Comments (0)

Sunday, October 17, 2021

"Smoke and Fears: The Effects of Marijuana Prohibition on Crime"

The title of this post is the title of this notable new working paper authored by Scott Callahan, David M. Bruner and Chris Giguere. Here is its abstract:

U.S. drug policy presumes prohibition reduces crime.  Recently states have enacted medical marijuana laws creating a natural experiment to test this hypothesis but is impeded by severe measurement error with available data.  We develop a novel imputation procedure to reduce measurement error bias and estimate significant reductions in violent and property crime rates, with heterogeneous effects across and within states and types of crime, contradicting drug prohibition policy.  We demonstrate uncorrected measurement error or assuming homogeneous policy effects leads to underestimation of crime reduction from ending marijuana prohibition.

And here is a key paragraph from the paper's introduction:

Our results indicate that MMLs result in significant reductions in both violent and property crime rates, with larger effects in Mexican border states.  While these results for violent crime rates are consistent with previously reported evidence (Gavrilova et al., 2017), we are the first paper to report such an effect on property crime as well.  Moreover, the estimated effects of MMLs on property crime rates are substantially larger, which is not surprising given property crimes are more prevalent.  We also find novel evidence consistent with our hypothesis that MMLs reduce violent crime rates more in urban counties compared to rural counties, contrary to previous estimates (Chu and Townsend, 2019).  We attribute this result to greater conflict between producers in urban counties under prohibition.  Overall, our results are consistent with the need for market participants to create de facto property rights under prohibition, often through the use of violence.  Our results are also consistent with prohibition causing a diversion of scarce policing resources, which when reallocated have the greatest impact on more pervasive types of crime and in locations where crime rates are higher.  These findings demonstrate both the importance of accounting for heterogeneous policy effects on crime and the necessity to correct for measurement error in crime data when conducting policy analysis.

October 17, 2021 in Criminal justice developments and reforms, Medical Marijuana Data and Research, Recreational Marijuana Data and Research | Permalink | Comments (0)

Friday, September 3, 2021

"Lower-Risk Cannabis Use Guidelines for reducing health harms from non-medical cannabis use: A comprehensive evidence and recommendations update"

The title of this post is the title of this new article by multiple authored appearing in the International Journal of Drug Policy. Here is its abstract:

Background

Cannabis use is common, especially among young people, and is associated with risks for various health harms.  Some jurisdictions have recently moved to legalization/regulation pursuing public health goals.  Evidence-based ‘Lower Risk Cannabis Use Guidelines’ (LRCUG) and recommendations were previously developed to reduce modifiable risk factors of cannabis-related adverse health outcomes; related evidence has evolved substantially since.  We aimed to review new scientific evidence and to develop comprehensively up-to-date LRCUG, including their recommendations, on this evidence basis.

Methods

Targeted searches for literature (since 2016) on main risk factors for cannabis-related adverse health outcomes modifiable by the user-individual were conducted.  Topical areas were informed by previous LRCUG content and expanded upon current evidence. Searches preferentially focused on systematic reviews, supplemented by key individual studies.  The review results were evidence-graded, topically organized and narratively summarized; recommendations were developed through an iterative scientific expert consensus development process.

Results

A substantial body of modifiable risk factors for cannabis use-related health harms were identified with varying evidence quality.  Twelve substantive recommendation clusters and three precautionary statements were developed.  In general, current evidence suggests that individuals can substantially reduce their risk for adverse health outcomes if they delay the onset of cannabis use until after adolescence, avoid the use of high-potency (THC) cannabis products and high-frequency/-intensity of use, and refrain from smoking-routes for administration.  While young people are particularly vulnerable to cannabis-related harms, other sub-groups (e.g., pregnant women, drivers, older adults, those with co-morbidities) are advised to exercise particular caution with use-related risks.  Legal/regulated cannabis products should be used where possible.

Conclusions

Cannabis use can result in adverse health outcomes, mostly among sub-groups with higher-risk use.  Reducing the risk factors identified can help to reduce health harms from use.  The LRCUG offer one targeted intervention component within a comprehensive public health approach for cannabis use.  They require effective audience-tailoring and dissemination, regular updating as new evidence become available, and should be evaluated for their impact.

September 3, 2021 in Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research | Permalink | Comments (0)

Thursday, July 22, 2021

"Recreational Cannabis Legalization and Alcohol Purchasing: A Difference-in-Differences Analysis"

The title of this post is the title of this notable new research by Collin Calvert and Darin Erickson now available via SSRN. Here is its abstract:

Background:  Whether recreational cannabis legalization is associated with changes in alcohol consumption (suggesting a potential substitution or complementary relationship) is a key question as cannabis policy evolves, particularly given the adverse health and social effects of alcohol use.  Relatively little research has explored this question.

Methods This study examined the association between recreational cannabis legalization and alcohol purchasing in the U.S. using an interrupted time series design. We used data from the Nielsen Consumer Panel (2004-2017) from 69,761 households in all 50 states to calculate monthly milliliters of pure ethanol purchased for four beverage categories (beer, wine, spirits, and all alcohol products). We used difference-in-differences models and robust cluster standard errors to compare changes in milliliters of pure ethanol purchased.  We fit models for each beverage category, comparing three “policy” states that have legalized recreational cannabis (Colorado, Oregon, and Washington) to states that had not legalized recreational cannabis.  In one set of models, a single control state was selected that matched pre-policy purchasing trends in the policy states.  In another set, policy states were compared to all states that had not legalized recreational cannabis.

Results:  Compared to all other states that did not legalize recreational cannabis, Colorado households showed a 13% average monthly decrease in purchases of all alcoholic products combined (estimate: 0.87; CI: 0.77, 0.98) and a 6% decrease in wine (0.94; CI: 0.89, 0.99).  Estimates in Washington were suggestive of an increase in spirits purchased in both the unrestricted (1.24; CI: 1.12, 1.37) and restricted sample (1.18; CI: 1.02, 1.36).  Oregon showed a significant decrease in monthly spirits purchased when compared to its selected comparator state (0.87; CI: 0.77, 0.99) and to all other states without legalized recreational cannabis (0.85; CI: 0.77, 0.95).

Conclusions Results suggest that alcohol and cannabis are not clearly substitutes nor complements to one-another.  Future studies should examine additional states as more time passes and more post-legalization data becomes available, use cannabis purchase data and consider additional methods for control selection in quasi-experimental studies. 

July 22, 2021 in Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research | Permalink | Comments (0)

Wednesday, July 21, 2021

Notable new report on the "Impacts of Marijuana Legalization in Colorado"

As discussed in this local news piece, this week brought this big new report with lots of new data on some of the impacts of marijuana reform in Colorado.  Here are excerpts from the press account:

More than seven years since Colorado became the first state to allow cannabis to be sold at stores for recreational use, pot arrests are down, marijuana-impaired driving cases are up and school expulsions are both up and down.

Those numbers — and a whole lot more — come from a new report released Monday by the state Department of Public Safety, which is required by law to study the impacts of cannabis legalization. In a new 180-page report, a statistical analyst from the department’s Division of Criminal Justice painstakingly goes through the numbers to provide the most comprehensive summary available about what has happened since voters in 2012 approved a state constitutional amendment legalizing possession and sales of small amounts marijuana. (Recreational cannabis stores opened during a New Year’s Day snowstorm in 2014.)

But the analyst, a longtime tracker of marijuana data named Jack Reed, is also hesitant about drawing conclusions from this mountain of information. He cited inconsistencies in how data was collected and other limitations that make it difficult to draw hard conclusions. “The lack of pre-commercialization data, the decreasing social stigma, and challenges to law enforcement combine to make it difficult to translate these preliminary findings into definitive statements of outcomes,” he wrote.

Here’s what Reed found: Marijuana-related arrests are down....

Major marijuana-related crime has been on a rollercoaster....

Marijuana DUIs are up....

Adults are using cannabis more — especially older adults....

Hospitalizations have leveled off....

It’s not clear if kids are using cannabis more....

School expulsions were way up, then way down....

Tax revenue has grown....

July 21, 2021 in Criminal justice developments and reforms, Recreational Marijuana Data and Research | Permalink | Comments (0)

Tuesday, July 13, 2021

Interesting look into marijuana reform and home values

I just came across this interesting new online report from the realtor website Clever Real Estate under the heading "2021 Study: How Legalizing Recreational Marijuana Impacts Home Values."  Here are excerpts:

To learn how marijuana legalization may impact real estate, we used publicly available data from Zillow and the U.S. Census, among other sources, to explore the relationships between home values, marijuana legalization, dispensaries, and tax revenue.  We used multiple regression analyses to model current trends and predict future patterns.

Overall, we found marijuana legalization leads to higher property values and millions of dollars in new tax revenue.  In fact, states that legalize recreational marijuana and add new retail dispensaries see far greater property value and tax revenue gains than states that block dispensaries or limit marijuana to medicinal use.

KEY TAKEAWAYS

  • From 2017 to 2019, home values increased $6,338 more in states where marijuana is legal in some form, compared to states that haven’t legalized marijuana. 

  • As states tax marijuana sales for the first time, the increased revenue drives new investment in things such as public services and infrastructure — which in turn drives higher demand in real estate, higher property values, and greater revenue from property taxes.

  • On average, home values increase by $470 for every $1 million increase in tax revenue.  In 2020, the eight states that reported a full year of marijuana tax revenue earned $2.3 billion — including $1 billion in California alone.  The seven states (and Washington, D.C.) that have yet to collect a full year of marijuana taxes are predicted to collectively bring in $601 million in new annual tax revenue.

  • States that have legalized and allowed sales of recreational marijuana see the biggest increases in home values: Between April 2017 and April 2021, property values rose $17,113 more in states where recreational marijuana is legal, compared to states where marijuana is illegal or limited to medicinal use.

  • In the five states that have legalized recreational marijuana but have yet to begin sales, home values are predicted to increase by an average of $61,343 when sales go into effect.  Among states that have legalized recreational marijuana, California has seen the biggest increase in home values — up by $128,341 since 2017, after we controlled for other variables.

  • We found that cities with more dispensaries are positively correlated with higher home values, suggesting legalization boosts jobs and economic growth. Home values increased $22,090 more in cities with recreational dispensaries, compared to home values in cities where recreational marijuana is legal but dispensaries are not available. With each new dispensary a city adds, property values increase by $519.

July 13, 2021 in Medical Marijuana State Laws and Reforms, Recreational Marijuana Data and Research, Taxation information and issues | Permalink | Comments (0)

Friday, June 18, 2021

"Changes in traffic crash rates after legalization of marijuana: results by crash severity"

The title of this post is the title of this new research authored by Charles Farmer, Samuel Monfort and Amber Woods and supported by the Insurance Institute for Highway Safety.  Here is its abstract:

Objective:  The objective of this study was to estimate the effects of marijuana legalization on injury and fatal traffic crash rates in the United States during the period 2009–2019.

Method:  State-by-state quarterly crash rates per mile of travel were modeled as a function of time, unemployment rate, maximum posted speed limit, seat belt use rate, alcohol use rate, and indicators of legalized recreational marijuana sales and use.

Results:  Legalization of the recreational use of marijuana was associated with a statistically significant 6.6% increase in injury crash rates and a nonsignificant 2.3% increase in fatal crash rates.  In contrast, the subsequent onset of retail marijuana sales ― 3 to 18 months later depending on the state ― did not elicit additional substantial increases to injury or fatal crash rates.  Thus, the combined effect of legalization and retail sales was a statistically significant 5.9% increase in injury crash rates and a nonsignificant 3.8% increase in fatal crash rates.  However, these estimates varied by state.  The effects of legal marijuana use and sales on injury crash rates ranged from a 7% decrease to an 18% increase.  The effects on fatal crash rates ranged from an 8% decrease to a 4% increase.

Conclusions:  The estimated increases in injury and fatal crash rates after marijuana legalization are consistent with earlier studies, but they were not always statistically significant, and the effects varied across states.  However, this is an early look at the time trends, and researchers and policymakers need to continue monitoring the data.  National, state, and local governments considering changes to their marijuana policies should be cautious, proceed slowly, and take note of the lessons learned from these initial experiences.

June 18, 2021 in Recreational Marijuana Data and Research | Permalink | Comments (0)

Thursday, June 10, 2021

Another notable accounting of marijuana tax revenues

Tax-revenueIn this prior post, I flagged of this recent report and accounting from folks at the Marijuana Policy Project titled "Marijuana Tax Revenue in States that Regulate Marijuana for Adult Use."  While that report focused on cumulative tax revenue in various states, this recent MJBiz Daily article, headlined "Marijuana legalization efforts get boost from billions in MJ tax dollars," drills into some more tax specifics while also discussing the MPP report.  I recommend the piece in full, and here are excerpts:

Adult-use marijuana programs are generating billions of dollars in tax revenues for state governments each year – bolstering the economic and equity case for legalization in other markets across the country as well as at the federal level. The economic argument might particularly resonate among reluctant Republican lawmakers on Capitol Hill, experts say....

MPP’s tax revenue report comes as the organization is involved in adult-use legalization advocacy efforts in Connecticut, Delaware and Rhode Island – and in the wake of successful recreational marijuana legalization across the country in the past few months from New York to New Mexico.  Maryland is on MPP’s radar for next year ... as are potentially several other states....

Social equity and racial justice issues have become critical pieces in adult-use legalization negotiations, and tax revenues are important because they help fund those programs.  In New York, state tax revenues will be directed toward community reinvestment grants (40%), public schools (20%) and drug-treatment and public-health programs (40%).

Other states also are using portions of the tax revenues for such areas as childcare services (California), conservation (Montana), environment (California), law enforcement (Oregon and Maine), mental-health services (Illinois), public transportation (Michigan) and reentry programs for those imprisoned with drug convictions (Alaska)....

The report doesn’t detail the hundreds of thousands of dollars of revenue generated for cities and towns from local cannabis taxes or the various economic development impacts such as job creation.  But other studies have.  The newly published MJBizFactbook, for example, estimates that the total U.S. economic impact from marijuana sales in 2021 is expected to reach $92 billion – up more than 30% from last year – and upwards of $160 billion in 2025.

June 10, 2021 in Recreational Marijuana Data and Research, Recreational Marijuana State Laws and Reforms, Taxation information and issues | Permalink | Comments (0)

Sunday, June 6, 2021

"Illegal drug market responses to state recreational cannabis laws"

The title of this post is the title of this notable research report recently published in the journal Addiction authored by Angélica Meinhofer and Adrian Rubli. Here is its abstract:

Background and Aims

In the United States, 15 states and the District of Columbia have implemented recreational cannabis laws (RCLs) legalizing recreational cannabis use. We aimed to estimate the association between RCLs and street prices, potency, quality and law enforcement seizures of illegal cannabis, methamphetamine, cocaine, heroin, oxycodone,hydrocodone, morphine, amphetamine and alprazolam.

Design

We pooled crowd sourced data from 2010–19 Price of Weed and 2010–19 Street Rx, and administrative data from the 2006–19 System to Retrieve Information from DrugEvidence (STRIDE) and the 2007–19 National Forensic Laboratory Information System (NFLIS). We employed a difference-in-differences design that exploited the staggered implementation of RCLs to compare changes in outcomes between RCL and non-RCL states.

Setting and cases

Eleven RCL and 40 non-RCL US states.

Measures

The primary outcome was the natural log of prices per gram, overall and by self-reported quality. The primary policy was an indicator of RCL implementation, dened using effective dates.Findings The street price of cannabis decreased by 9.2%[β = 0.092; 95% confidence interval (CI) = 0.15–, –0.03] in RCL states after RCL implementation, with largest declines among low-quality purchases (β = 0.195; 95% CI = –0.282, –0.108). Price declines were accompanied by a 93%(β = 0.93; 95% CI = –1.51, –0.36) reduction in law enforcement seizures of cannabis in RCL states. Among illegal opioids, including heroin, oxycodone and hydrocodone, street prices increased and law enforcement seizures decreased in RCLstates.

Conclusions

Recreational cannabis laws in US states appear to be associated with illegal drug market responses in those states, including reductions in the street price of cannabis.  Changes in the street prices of illegal opioids analyzed may suggest that in states with recreational cannabis laws the markets for other illegal drugs are not independent of legal cannabis market regulation.

June 6, 2021 in Criminal justice developments and reforms, Recreational Marijuana Data and Research | Permalink | Comments (0)

Friday, May 28, 2021

"Marijuana Tax Revenue in States that Regulate Marijuana for Adult Use"

DownloadThe title of this post is the title of this notable new report and accounting from folks at the Marijuana Policy Project.  Here is how it gets started (with my highlight):

Legalizing marijuana for adults has been a wise investment.  Since 2014 when sales began in Colorado and Washington, legalization policies have provided states a new revenue stream to bolster budgets and fund important services and programs.  As of May 2021, states reported a combined total of $7.9 billion in tax revenue from legal, adult-use marijuana sales.  In addition to revenue generated for statewide budgets, cities and towns have also generated hundreds of thousands of dollars in new revenue from local adult-use cannabis taxes.

Eighteen states have enacted laws legalizing, taxing, and regulating cannabis for adults 21 and older.  Eight of the laws passed in 2020 or 2021, and in seven of those states, licensing and tax collections have not yet begun.  This document reviews each state’s adult-use cannabis tax structure, population, and revenue from legalization.  It does not include medical cannabis tax revenue, application and licensing fees paid by cannabis businesses, additional income taxes generated by workers in the cannabis industry, or corporate taxes paid to the federal government.

The report provides a helpful overview of all the basic tax structures in place for adult-use marijuana as of May 2021, as well as reports on total collections in these states to date. Notably, while Colorado is often thought about as the first legalization state and California is rightly seen as the biggest legalization state, this report details that Washington is as of now the richest state in tax revenues with over $2.5 billion collected.  (But California's tax revenue in 2020 was nearly twice that of Washington's according to this report, so by 2022 we should expect the Golden State to have collected the most tax gold from adult-use marijuana legalization.)

May 28, 2021 in Business laws and regulatory issues, History of Marijuana Laws in the United States, Recreational Marijuana Data and Research, Recreational Marijuana State Laws and Reforms, Taxation information and issues | Permalink | Comments (0)

Friday, May 21, 2021

"The Public Health Effects of Legalizing Marijuana"

The title of this post is the title of this new paper authored by D. Mark Anderson and Daniel I. Rees available via SSRN. Here is its abstract:

Thirty-six states have legalized medical marijuana and 14 states have legalized the use of marijuana for recreational purposes.  In this paper, we review the literature on the public health consequences of legalizing marijuana, focusing on studies that have appeared in economics journals as well as leading public policy, public health, and medical journals.  Among the outcomes considered are: youth marijuana use, alcohol consumption, the abuse of prescription opioids, traffic fatalities, and crime.  For some of these outcomes, there is a near consensus in the literature regarding the effects of medical marijuana laws (MMLs).  As an example, leveraging geographic and temporal variation in MMLs, researchers have produced little credible evidence to suggest that legalization promotes marijuana use among teenagers.  Likewise, there is convincing evidence that young adults consume less alcohol when medical marijuana is legalized.  For other public health outcomes such as mortality involving prescription opioids, the effect of legalizing medical marijuana has proven more difficult to gauge and, as a consequence, we are less comfortable drawing firm conclusions.  Finally, it is not yet clear how legalizing marijuana for recreational purposes will affect these and other important public health outcomes.  We will be able to draw stronger conclusions when more post-treatment data are collected in states that have recently legalized recreational marijuana.

May 21, 2021 in Medical Marijuana Commentary and Debate, Medical Marijuana Data and Research, Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research | Permalink | Comments (0)

Monday, April 12, 2021

"Nowhere to Now, Where? Reconciling Public Cannabis Use in a Public Health Legal Framework"

The title of this post is the title of this notable new paper authored by Daniel Orenstein now available via SSRN. Here is its abstract:

States continue to legalize recreational cannabis, but most have heavily restricted where consumption of newly licit cannabis is permitted.  Every legalizing state has thus far prohibited open, outdoor public use, either limiting lawful use to private property or allowing a small number of licensed indoor venues for consumption outside of public view, an approach borrowed from alcohol control.  In contrast, some non-U.S. jurisdictions have adopted a tobacco control approach, allowing limited outdoor public use while prohibiting indoor public use.  Each approach presents individual and population health risks that reflect the complex intersection of health, social inequities, and community norms.

Cannabis consumers face uncertain but potentially significant health risks from use, and the relative availability of use locations also implicates existing inequities in policing practices and housing.  Those who do not use cannabis but are exposed to others’ use face possible harms from secondhand smoke and from intoxicated behavior, with such risks likely to be inequitably distributed due to existing employment and housing patterns.  Communities as a whole also face risks, including that changing cannabis norms may increase use prevalence or intensity and that concentration of cannabis outlets in under-resourced communities may prove as detrimental as the concentration of other disfavored businesses has been.

Each public use approach carries attendant risks, but a regulatory framework based on the tobacco control model best balances the protection of public health and the promotion of equity and social justice.  This model recognizes the parallels between cannabis and tobacco (in addition to those between cannabis and alcohol).  This approach also provides a pathway to mitigating the public health risks of cannabis legalization by leveraging an approach that has proven effective at reducing secondhand exposures and denormalizing smoking behavior in the tobacco context.

April 12, 2021 in Business laws and regulatory issues, Medical community perspectives, Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)

Thursday, March 25, 2021

Spotlighting that marijuana tax revenues hit new high in 2020 at over $3 billion

031521_cannabis_figure-1-1024x706I have been recently thinking about metrics used to assess marijuana reform, and this recent post at the Just Taxes blog from the Institute on Taxation and Economic Policy flags a new benchmark in a notable metric. The piece by Carl is titled "State and Local Cannabis Tax Revenue Jumps 58%, Surpassing $3 Billion in 2020," and here are excerpts:

Cannabis taxes are a small part of state and local budgets, clocking in at less than 2 percent of tax revenue in the states with legal adult-use sales. But they’re also one of states’ fastest-growing revenue sources.

Powered by an expanding legal market and a pandemic-driven boost in cannabis use, excise and sales taxes on cannabis jumped by more than $1 billion in 2020, or 58 percent, compared to a year earlier. In total, these taxes raised more than $3 billion last year, including $1 billion in California alone. These are the findings of an ITEP analysis of newly released tax revenue data from the 10 states where legal sales of adult–use cannabis took place last year.

About a third (36 percent) of the nation’s cannabis tax revenue growth occurred in California as the state’s relatively new adult-use market continued to gain its footing after a somewhat sluggish start. The next most significant source of new revenue was Illinois, which started legal retail cannabis sales on Jan. 1, 2020.

States with more established markets such as Washington, Colorado, Oregon, and Alaska also saw significant growth in revenue, likely driven in part by an increase in cannabis use during a time of stay-at-home orders and self-quarantining. The slowest year-over-year growth, by contrast, occurred in Nevada as would-be tourists wary of COVID steered clear of Las Vegas. Nevada’s economy and state budget have been among the hardest hit in the nation during the pandemic. Even so, Nevada’s cannabis tax revenues rose 14 percent compared to a year earlier.

While the pandemic has taken a significant toll on state and local budgets overall, its impact on cannabis taxes (and alcohol taxes, for that matter) appears to have mostly been a positive one. Total excise and sales tax revenue from cannabis during the first six months of the pandemic (March through August 2020) shot up by 44 percent compared to the previous six-month period. That’s compared to 17 percent growth in the six months prior. The spike in revenue is clearly visible in the figure below. Notably, it occurred not just in the states with new markets like Illinois and Michigan where rapid growth would have been expected even under normal circumstances, but also across the five states with more established legal markets that launched between 2014 and 2017.

March 25, 2021 in History of Marijuana Laws in the United States, Medical Marijuana Data and Research, Recreational Marijuana Data and Research, Taxation information and issues | Permalink | Comments (0)

Thursday, February 18, 2021

New Leafly report asserts "legal cannabis now supports 321,000 full-time American jobs"

This short new "Jobs Report 2021" from Leafly provides a rosy account of the job creation contributions of the legalization of marijuana in US states.  Here is part of the start of the 16-page report:

How many jobs are there in America’s legal marijuana industry?  The 2021 Leafly Jobs Report found 321,000 full-time equivalent (FTE) jobs supported by legal cannabis as of January 2021.

To put that in perspective: In the United States there are more legal cannabis workers than electrical engineers.  There are more legal cannabis workers than EMTs and paramedics. There are more than twice as many legal cannabis workers as dentists.  And those jobs aren’t limited to Colorado and California. Medical marijuana is now legal in 37 states, while 15 states and Washington, DC, have legalized cannabis for all adults.  In Florida, there are now more cannabis workers than plumbers. In Pennsylvania, the state’s famous steel industry employs roughly 36,000 workers — and the state’s not-so-famous legal cannabis industry employs nearly 16,000. In Michigan, there are more cannabis workers than cops.

The annual Leafly Jobs Report, produced in partnership with Whitney Economics, is the nation’s cornerstone cannabis employment study. Federal prohibition prevents the US Department of Labor from counting state-legal marijuana jobs.  Since 2017, Leafly’s news and data teams have filled that gap with a yearly analysis of employment in the legal cannabis sector.  Whitney Economics, a leading consulting firm that specializes in cannabis economics, has partnered with Leafly on the project since 2019.

In real numbers, the cannabis job growth in 2020 represents a doubling of the previous year’s US job growth.  In 2019, the cannabis industry added 33,700 new US jobs for a total of 243,700.  Despite a year marked by a global pandemic, spiking unemployment, and economic recession, the legal cannabis industry added 77,300 full-time jobs in the United States.  That represents 32% year-over-year job growth, an astonishing figure in the worst year for US economic growth since World War II.  Outside the cannabis industry, the US economy shrank by 3.5%, the unemployment rate almost doubled, and nearly 10 million Americans saw their jobs disappear.

February 18, 2021 in Business laws and regulatory issues, Employment and labor law issues, Medical Marijuana Data and Research, Recreational Marijuana Data and Research | Permalink | Comments (1)

Thursday, February 11, 2021

"The Effect of State Marijuana Legalizations: 2021 Update"

The title of this post is the title of this recent "Policy Analysis" from the folks at the Cato Institute.  This 40-page document was authored by Angela Dills, Sietse Goffard, Jeffrey Miron, and Erin Partin, and here is its executive summary:

In November 2012, Colorado and Washington approved ballot initiatives that legalized marijuana for recreational use under state law.  Since then, nine additional states (Alaska, Oregon, California, Nevada, Maine, Vermont, Massachusetts, Michigan, and Illinois) plus the District of Columbia have followed suit, either by ballot initiative or legislative action.  Voters in four other states (New Jersey, South Dakota, Arizona, and Montana) approved state ballot measures legalizing marijuana for personal use in the November 2020 election.

Supporters and critics make numerous claims about state-level marijuana legalizations.  Advocates suggest that legalization reduces crime, raises tax revenue, lowers criminal justice expenditures, improves public health, increases traffic safety, and stimulates the economy.  Critics argue that legalization spurs marijuana and other drug or alcohol use, increases crime, diminishes traffic safety, harms public health, and lowers teen educational achievement.

In previous work, we found that the strong claims made by both advocates and critics are substantially overstated and in some cases entirely without support from existing legalizations; mainly, state legalizations have had minor effects.  This paper updates previous work to account for additional years of data and the increase in the number of states with legalized marijuana.  Our conclusions remain the same, but our assessments of legalization’s effects remain tentative because of limitations in the data.  The existing data nevertheless provide a useful perspective on what other states should expect from legalization or related policies.

February 11, 2021 in Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research, Recreational Marijuana State Laws and Reforms | Permalink | Comments (1)