The Impact of Recreational Cannabis Laws on Cannabis Use: How You Measure the Market Matters
Abstract
As of January 1, 2021, over half of US states have allowed cannabis for medical use, and 10 states have allowed recreational sales. The value of the legal cannabis market has grown to exceed $38 billion in 2019 and is estimated to nearly triple in value in 5 years. Considerable research attention has been given to the impact of legalization on a variety of public health and criminal justice outcomes. However, criticisms have been raised due to the literature’s lack of distinction between the passage of the law, opening of markets, and the growth of markets. Physical availability is something regulators have been told to consider carefully. Exposure to retailers is expected to increase use of cannabis by increasing environmental cues promoting use, reducing search costs, deterring quit attempts and lowering prices due to competition. Strategically managing availability might allow for growth in the market while helping reduce potential harmful effects of legalization on various public health outcomes such as youth use, motor vehicle crashes and psychoses.In this paper we investigate how legalization of cannabis for adult-use (i.e. “recreational cannabis”) influences cannabis-related use and harm focusing on alternative ways cannabis policy has been evaluated. We make use of Colorado’s early market experience for both medical and recreational cannabis (2010-2018), and exploit the natural within state variation in access to medical and recreational markets. Merging data from Colorado’s Department of Revenue on licensed outlets and the Colorado Hospital Association data on cannabis-involved ED and inpatient visits at the county level, we demonstrate how and why it is important to appropriately consider the presence and size of medical markets when evaluating the impacts of legalization on cannabis use. Our results suggest that impacts of restrained cannabis markets on cannabis use.