The Effect of State Marijuana Legalizations: 2021 Update – Cato Institute

Medical Cannabis Legalisation

1. Colorado passed Amendment 64 in November 2012. See “Amendment 64: Use and Regulation of Marijuana,” Colorado, http://www.fcgov.com/mmj/pdf/amendment64.pdf. Washington passed Initiative 502 in November 2012. See “Initiative Measure No. 502,” Washington, July 8, 2011, https://sos.wa.gov/_assets/elections/initiatives/i502.pdf.

2. In November 2014, the District of Columbia legalized the use, possession, and cultivation of limited amounts of marijuana in the privacy of one’s home. Because of ongoing federal prohibition, marijuana remains illegal on federal land, which makes up 30 percent of Washington DC. Therefore, we do not examine data for Washington. For more information, see “The Facts on DC Marijuana Laws,” Metropolitan Police Department, http://mpdc.dc.gov/marijuana.

3. Ethan Nadelmann, “Marijuana Legalization: Not If, but When,” Huffington Post, November 3, 2010.

4. Kelsey Osterman, “Gary Johnson: Legalizing Marijuana Will Lead to Lower Overall Substance Abuse,” Red Alert Politics, April 24, 2013, https://web.archive.org/web/20130602173958/http://redalertpolitics.com/2013/04/24/gary-johnson-legalizing-marijuana-will-lead-to-less-overall-substance-abuse/.

5. Sadie Gurman, “Denver’s Top Law Enforcement Officers Disagree: Is Crime Up or Down?,” Associated Press, January 22, 2014.

6. Jack Healy, “After 5 Months of Sales, Colorado Sees the Downside of a Legal High,” New York Times, May 31, 2014; Josh Voorhees, “Going to Pot?,” Slate, May 21, 2014; and Rob Hotakainen, “Marijuana Is Drug Most Often Linked to Crime, Study Finds,” McClatchy Washington Bureau, May 23, 2013.

7. Matt Ferner, “Gov. John Hickenlooper Opposes Legal Weed: ‘Colorado Is Known for Many Great Things, Marijuana Should Not Be One of Them,” Huffington Post, September 12, 2012.

8. Edwin Meese III and Charles Stimson, “The Case against Legalizing Marijuana in California,” Philadelphia Inquirer, October 3, 2010.

9. Kevin A. Sabet, “SABET: Colorado Will Show Why Legalizing Marijuana Is a Mistake,” Washington Times, January 17, 2014.

10. David W. Murray and John P. Walters, “The Devastation That’s Really Happening in Colorado,” Weekly Standard, July 10, 2014.

11. John Ingold, “U.S. Attorney John Walsh Justifies Federal Crackdown on Medical-Marijuana Shops,” Denver Post, updated July 29, 2016.

12. Gurman, “Is Crime Up or Down?”

13. Robert MacCoun et al., “Do Citizens Know Whether Their State Has Decriminalized Marijuana? Assessing the Perceptual Component of Deterrence Theory,” Review of Law and Economics 5, no. 1 (January 2009): 347–71.

14. Jeffrey Miron, “Marijuana Policy in Colorado,” Cato Institute Working Paper no. 24, October 23, 2014; Andrew A. Monte et al., “The Implications of Marijuana Legalization in Colorado,” Journal of the American Medical Association 313, no. 3 (January 20, 2015): 241–2; Stacy Salomonsen-Sautel et al., “Trends in Fatal Motor Vehicle Crashes before and after Marijuana Commercialization in Colorado,” Drug and Alcohol Dependence 140 (July 1, 2014): 137–44; Beau Kilmer et al., “Altered State? Assessing How Marijuana Legalization in California Could Influence Marijuana Consumption and Public Budgets,” Occasional Paper, Drug Policy Research Center, RAND Corporation, 2010; Angela Hawken et al., “Quasi-Legal Cannabis in Colorado and Washington: Local and National Implications,” Addiction 108, no. 5 (May 2013): 837–8; Howard S. Kim et al., “Marijuana Tourism and Emergency Department Visits in Colorado,” New England Journal of Medicine 374, no. 8 (February 25, 2016): 797–8; John Hudak, “Colorado’s Rollout of Legal Marijuana Is Succeeding,” Brookings Institution Governance Studies, Center for Effective Public Management at Brookings, July 2014; Glenn Greenwald, “Drug Decriminalization in Portugal: Lessons for Creating Fair and Successful Drug Policies,” Cato Institute white paper, April 2, 2009; Robert J. MacCoun, “What Can We Learn from the Dutch Cannabis Coffeeshop System,” Addiction 106, no. 11 (November 2011): 1899–1910; Ali Palali and Jan C. van Ours, “Distance to Cannabis Shops and Age of Onset of Cannabis Use,” Health Economics 24, no. 11 (November 2015): 1482–1501; Jenny Williams and Anne Line Bretteville-Jensen, “Does Liberalizing Cannabis Laws Increase Cannabis Use?,” Journal of Health Economics 36 (July 2014): 20–32; Nils Braakman and Simon Jones, “Cannabis Depenalisation, Drug Consumption and Crime—Evidence from the 2004 Cannabis Declassification in the UK,” Social Science & Medicine 115 (August 2014): 29–37; and Jérôme Adda et al., “Crime and the Depenalization of Cannabis Possession: Evidence from a Policing Experiment,” Journal of Political Economy 122, no. 5 (2014): 1130–1202.

15. Angela Dills, Sietse Goffard, and Jeffrey Miron, “Dose of Reality: The Effect of State Marijuana Legalizations,” Cato Institute Policy Analysis no. 799, September 16, 2016. We do not analyze data for Vermont because recreational use was officially legal only as of July 1, 2018, and no retail structure is currently in place.

16. Opium, cocaine, coca leaves, and other derivatives of coca and opium had been essentially outlawed in 1914 by the Harrison Anti-Narcotic Act. See C. E. Terry, “The Harrison Anti-Narcotic Act,” American Journal of Public Health 5, no. 6 (June 1, 1915): 518.

17. “When and Why Was Marijuana Outlawed?,” Schaffer Library of Drug Policy, http://druglibrary.org/schaffer/library/mj_outlawed.htm.

18. Mathieu Deflem, ed., Sociology of Crime, Law and Deviance, vol. 14: Popular Culture, Crime, and Social Control (Bingley, UK: Emerald Publishing, 2010), p. 13.

19. Kathleen Ferraiolo, “From Killer Weed to Popular Medicine: The Evolution of American Drug Control Policy, 1937–2000,” Journal of Policy History 19, no. 2 (2007): 147–79.

20. David F. Musto, “Opium, Cocaine and Marijuana in American History,” Scientific American 265, no. 1 (July 1991): 20–27.

21. Office on Drugs and Crime, “Traffic in Narcotics, Barbiturates and Amphetamines in the United States,” United Nations, January 1, 1956, https://www.unodc.org/unodc/en/data-and-analysis/bulletin/bulletin_1956-01-01_3_page005.html.

22. See “Drug Scheduling,” U.S. Drug Enforcement Administration, www.dea.gov/druginfo/ds.shtml.

23. Rosalie Liccardo Pacula, Jamie F. Chriqui, and Joanna King, “Marijuana Decriminalization: What Does It Mean for the United States?,” National Bureau of Economic Research Working Paper no. 9690, May 2003.

24. See “Assembly Bill No. 453,” Nevada, https://www.leg.state.nv.us/71st/bills/AB/AB453_EN.html; and for an overview of states with marijuana decriminalization laws, see “Decriminalization,” National Organization for the Reform of Marijuana Laws, https://norml.org/laws/decriminalization/.

25. Igor Grant et al., “Medical Marijuana: Clearing Away the Smoke,” Open Neurology Journal 6 (2012): 18–25; Janet E. Joy, Stanley J. Watson, and John A. Benson Jr., eds., Marijuana and Medicine: Assessing the Science Base (Washington: National Academies Press, 1999); Joan L. Kramer, “Medical Marijuana for Cancer,” CA 65, no. 2 (March/April 2015): 109–22; Edward Maa and Paige Figi, “The Case for Medical Marijuana in Epilepsy,” Epilepsia 55, no. 6 (June 2014): 783–6; Lisa M. Eubanks et al., “A Molecular Link between the Active Component of Marijuana and Alzheimer’s Disease Pathology,” Molecular Pharmaceutics 3, no. 6 (August 2006): 773–7; and Gary D. Novack, “Cannabinoids for Treatment of Glaucoma,” Current Opinion in Ophthalmology 27, no. 2 (March 2016): 146–50.

26. “State Medical Marijuana Laws,” National Conference of State Legislatures, November 10, 2020, https://www.ncsl.org/research/health/state-medical-marijuana-laws.aspx.

27. “2020 Marijuana Policy Reform Legislation,” Marijuana Policy Project, updated November 20, 2020, https://www.mpp.org/issues/legislation/key-marijuana-policy-reform/.

28. “Michigan Local Decriminalization,” National Organization for the Reform of Marijuana Laws, https://norml.org/laws/local-decriminalization/michigan-local-decriminalization.

29. Vermont passed Senate Bill 76 on May 19, 2004, which legalized medical marijuana, but it was not until June 6, 2013, that House Bill 200 decriminalized the possession of 1 ounce of marijuana or less. See “S. 76,” Vermont, http://www.leg.state.vt.us/docs/legdoc.cfm?URL=/docs/2004/bills/senate/S-076.HTM; and “H.200,” Vermont, https://legislature.vermont.gov/Documents/2014/Docs/BILLS/H-0200/H-0200%20As%20Passed%20by%20Both%20House%20and%20Senate.pdf.

30. Recent work includes the following: D. Mark Anderson, Daniel I. Rees, and Joseph J. Sabia, “Medical Marijuana Laws and Suicides by Gender and Age,” American Journal of Public Health 104, no. 12 (December 2014): 2369–76; D. Mark Anderson, Benjamin Hansen, and Daniel I. Rees, “Medical Marijuana Laws and Teen Marijuana Use,” American Law and Economic Review 17, no. 2 (2015): 495–528; Esther K. Choo et al., “The Impact of State Medical Marijuana Legislation on Adolescent Marijuana Use,” Journal of Adolescent Health 55, no. 2 (August 2014): 160–66; Yu-Wei Luke Chu, “Do Medical Marijuana Laws Increase Hard-Drug Use?,” Journal of Law and Economics 58, no. 2 (May 2015): 481–517; Dennis M. Gorman and J. Charles Huber Jr., “Do Medical Cannabis Laws Encourage Cannabis Use?,” International Journal of Drug Policy 18, no. 3 (May 2007): 160–67; Sam Harper, Erin C. Strumpf, and Jay S. Kaufman, “Do Medical Marijuana Laws Increase Marijuana Use? Replication Study and Extension,” Annals of Epidemiology 22, no. 3 (March 2012): 207–12; Sarah D. Lynne-Landsman, Melvin D. Livingston, and Alexander C. Wagenaar, “Effects of State Medical Marijuana Laws on Adolescent Marijuana Use,” American Journal of Public Health 103, no. 8 (August 2013): 1500–06; Karen O’Keefe and Mitch Earleywine, “Marijuana Use by Young People: The Impact of State Medical Marijuana Laws,” Marijuana Policy Project, updated June 2011; Hefei Wen, Jason M. Hockenberry, and Janet R. Cummings, “The Effect of Medical Marijuana Laws on Marijuana, Alcohol, and Hard Drug Use,” National Bureau of Economic Research Working Paper no. 20085, May 2014; Rosalie Liccardo Pacula et al., “Assessing the Effects of Medical Marijuana Laws on Marijuana and Alcohol Use: The Devil Is in the Details,” National Bureau of Economic Research Working Paper no. 19302, August 2013; Choo et al., “Impact of State Medical Marijuana Legislation”; Anna Choi, Dhaval Dave, and Joseph J. Sabia, “Smoke Gets in Your Eyes: Medical Marijuana Laws and Tobacco Cigarette Use,” American Journal of Health Economics 5, no. 3 (2019): 303–33; and Lauren Hersch Nicholas and Johanna Catherine Maclean, “The Effect of Medical Marijuana Laws on the Health and Labor Supply of Older Adults: Evidence from the Health and Retirement Study,” Journal of Policy Analysis and Management 38, no. 2 (2019): 455–80.

31. Data are reported as two-year averages. “National Survey on Drug Use and Health 2002–2014 (NSDUH-2002-2014-DS0001),” Substance Abuse and Mental Health Services Administration, https://www.datafiles.samhsa.gov/study-dataset/national-survey-drug-use-and-health-2002-2014-nsduh-2002-2014-ds0001-nid16960.

32. Madeline H. Meier et al., “Persistent Cannabis Users Show Neuropsychological Decline from Childhood to Midlife,” Proceedings of the National Academy of Sciences 109, no. 40 (October 2, 2012): E2657–64.

33. Claire Mokrysz et al., “Are IQ and Educational Outcomes in Teenagers Related to Their Cannabis Use? A Prospective Cohort Study,” Journal of Psychopharmacology 30, no. 2 (2016): 159–68.

34. Deborah A. Cobb-Clark et al., “‘High’-School: The Relationship between Early Marijuana Use and Educational Outcomes,” Economic Record 91, no. 293 (June 2015): 247–66.

35. Daniel F. McCaffrey et al., “Marijuana Use and High School Dropout: The Influence of Unobservables,” Health Economics 19, no. 11 (November 2010): 1281–99.

36. M. Christopher Roebuck, Michael T. French, and Michael L. Dennis, “Adolescent Marijuana Use and School Attendance,” Economics of Education Review 23, no. 2 (2004): 133–41.

37. Olivier Marie and Ulf Zölitz, “‘High’ Achievers? Cannabis Access and Academic Performance,” Center for Economic Studies and Ifo Institute Working Paper no. 5304, April 2015.

38. Jan C. van Ours and Jenny Williams, “Cannabis Use and Its Effects on Health, Education and Labor Market Success,” Journal of Economic Surveys 29, no. 5 (December 2015): 993–1010.

39. Paolo Rungo et al., “Parental Education, Child’s Grade Repetition and the Modifier Effect of Cannabis Use,” Applied Economics Letters 22, no. 3 (2015): 199–203; Jan C. van Ours and Jenny Williams, “Why Parents Worry: Initiation into Cannabis Use by Youth and Their Educational Attainment,” Journal of Health Economics 28, no. 1 (2009): 132–42; and Pinka Chatterji, “Illicit Drug Use and Educational Attainment,” Health Economics 15, no. 5 (May 2006): 489–511.

40. State-level data from “National Survey on Drug Use and Health 2002–2014 (NSDUH-2002-2014-DS0001),” Substance Abuse and Mental Health Services Administration.

41. Dale H. Gieringer, “Testimony on the Legalization of Marijuana to the California Assembly Committee on Public Safety,” National Organization for the Reform of Marijuana Laws, October 28, 2009, https://web.archive.org/web/20180518035711/http://norml.org/pdf_files/AssPubSafety_Legalization.pdf.

42. RAND Corporation, “Legalizing Marijuana in California Would Sharply Lower the Price of the Drug,” news release, July 7, 2010.

43. The website PriceOfWeed.com allows anyone to submit anonymous data about the price, quantity, and quality of marijuana that he or she purchases, as well as where the marijuana was purchased. The website has obvious limitations: The data are not a random sample; the consumer reports do not distinguish between marijuana bought through legal means and through underground markets; self-reported data may not be accurate; and the data are probably from a self-selecting crowd of marijuana enthusiasts. To reduce the impact of inaccurate submissions, the website automatically removes the bottom and top 5 percent of outliers when calculating its average prices. We were not able to calculate meaningful marijuana price averages from Alaska because of a relatively low number of entries from that state.

44. “National Survey on Drug Use and Health (NSDUH),” Substance Abuse and Mental Health Services Administration, https://www.samhsa.gov/data/data-we-collect/nsduh-national-survey-drug-use-and-health.

45. Dirk W. Lachenmeier and Jürgen Rehm, “Comparative Risk Assessment of Alcohol, Tobacco, Cannabis and Other Illicit Drugs Using the Margin of Exposure Approach,” Scientific Reports 5 (2015): 8126; “What Is the Most Dangerous Drug?,” The Economist, June 25, 2019; “Classification of Psychoactive Substances: When Science Was Left Behind,” Global Commission on Drug Policy, 2019; and Jacob Sullum, “New Evidence from Canada and the U.S. Suggests That Legalizing Marijuana Leads to Less Drinking,” Reason, January 8, 2020.

46. “National Survey on Drug Use and Health (NSDUH),” Substance Abuse and Mental Health Services Administration.

47. Anderson, Rees, and Sabia, “Medical Marijuana Laws and Suicides by Gender and Age.”

48. Lachenmeier and Rehm, “Comparative Risk Assessment of Alcohol, Tobacco, Cannabis and Other Illicit Drugs”; “What Is the Most Dangerous Drug?”; “Classification of Psychoactive Substances: When Science Was Left Behind,” Global Commission on Drug Policy; and Sullum, “Legalizing Marijuana Leads to Less Drinking.”

49. Anderson, Rees, and Sabia, “Medical Marijuana Laws and Suicides by Gender and Age”; and David Powell, Rosalie Liccardo Pacula, and Mireille Jacobson, “Do Medical Marijuana Laws Reduce Addictions and Deaths Related to Pain Killers?,” National Bureau of Economic Research Working Paper no. 21345, July 2015.

50. Stanley Zammit et al., “Self Reported Cannabis Use as a Risk Factor for Schizophrenia in Swedish Conscripts of 1969: Historical Cohort Study,” British Medical Journal 325, no. 7374 (November 23, 2002): 1199; Cécile Henquet et al., “Prospective Cohort Study of Cannabis Use, Predisposition for Psychosis, and Psychotic Symptoms in Young People,” British Medical Journal 330, no. 7481 (January 1, 2005): 11; Carey Goldberg, “Studies Link Psychosis, Teenage Marijuana Use,” Boston Globe, January 26, 2006; Matthew Shulman, “Marijuana Linked to Heart Disease and Depression,” U.S. News & World Report, May 14, 2008; Jan C. van Ours et al., “Cannabis Use and Suicidal Ideation,” Journal of Health Economics 32, no. 3 (May 2013): 524–37; Jan C. van Ours and Jenny Williams, “The Effects of Cannabis Use on Physical and Mental Health,” Journal of Health Economics 31, no. 4 (May 2012): 564–77; Jan C. van Ours and Jenny Williams, “Cannabis Use and Mental Health Problems,” Journal of Applied Econometrics 26, no. 7 (November/December 2011): 1137–56; and Jenny Williams and Christopher L. Skeels, “The Impact of Cannabis Use on Health,” De Economist 154, no. 4 (2006): 517–46.

51. National Institute on Drug Abuse, “Marijuana Research Report: What Are Marijuana’s Long-Term Impacts on the Brain?,” revised July 2020; and Elaine Kelly and Imran Rasul, “Policing Cannabis and Drug Related Hospital Admissions: Evidence from Administrative Records,” Journal of Public Economics 112 (April 2014): 89–114.

52. National Academies of Sciences, Engineering, and Medicine, The Health Effects of Cannabis and Cannabinoids: The Current State of Evidence and Recommendations for Research (Washington: National Academies Press, 2017).

53. Wide-ranging Online Data for Epidemiologic Research, Centers for Disease Control and Prevention, https://wonder.cdc.gov/.

54. For more, see Anne Case and Angus Deaton, “Rising Morbidity and Mortality in Midlife among White Non-Hispanic Americans in the 21st Century,” Proceedings of the National Academy of Sciences 112, no. 49 (2015): 15078–83; and Anderson, Rees, and Sabia, “Medical Marijuana Laws and Suicides by Gender and Age.”

55. Alex Berenson, “Marijuana Is More Dangerous Than You Think,” Missouri Medicine 116, no. 2 (March–April 2011): 88–9.

56. Matt Ferner, “If Legalizing Marijuana Was Supposed to Cause More Crime, It’s Not Doing a Very Good Job,” Huffington Post, July 17, 2014.

57. Jeffrey Miron, “Marijuana Policy in Colorado,” Cato Institute Working Paper no. 24, October 23, 2014; and Zhuang Hao and Benjamin W. Cowan, “The Cross-Border Spillover Effects of Recreational Marijuana Legalization,” Economic Inquiry 58, no. 2 (April 2020): 642–66.

58. “Marijuana Is Safer Than Alcohol: It’s Time to Treat It That Way,” Marijuana Policy Project, https://www.mpp.org/marijuana-is-safer/; and Peter Hoaken and Sherry Stewart, “Drugs of Abuse and the Elicitation of Human Aggressive Behavior,” Addictive Behaviors 28, no. 9 (December 2003): 1533–54.

59. “Crime in the U.S.,” Uniform Crime Reporting, Federal Bureau of Investigation, https://ucr.fbi.gov/crime-in-the-u.s.

60. Rune Elvik, “Risk of Road Accident Associated with the Use of Drugs: A Systematic Review and Meta-Analysis of Evidence from Epidemiological Studies,” Accident Analysis and Prevention 60 (2013): 254–67.

61. R. Andrew Sewell, James Poling, and Mehmet Sofuoglu, “The Effect of Cannabis Compared with Alcohol on Driving,” American Journal on Addictions 18, no. 3 (2009): 185–93.

62. Benjamin Hansen, Keaton Miller, and Caroline Weber, “Early Evidence on Recreational Marijuana Legalization and Traffic Fatalities,” Economic Inquiry 58, no. 2 (April 2020): 547–68.

63. For National Highway Traffic Safety Administration data, see “State Traffic Safety Information,” National Highway Traffic Safety Administration, Department of Transportation, 2018, www-nrd.nhtsa.dot.gov/departments/nrd30/ncsa/STSI/8_CO/2014/8_CO_2014.htm.

64. Diego Zambiasi and Steven Stillman, “The Pot Rush: Is Legalized Marijuana a Positive Local Amenity?,” IZA Discussion Paper no. 11392, March 2018.

65. Jim Spellman, “Colorado’s Green Rush: Medical Marijuana,” CNN, December 14, 2009; Arielle Milkman, “The Housing Crisis Amid Denver’s Cannabis Boom,” New Republic, October 12, 2015; Kathryn Vasel, “The Pot Effect on Denver’s Housing Market,” CNN Money, June 4, 2015; Cheng Cheng, Walter J. Mayer, and Yanling Mayer, “The Effect of Legalizing Retail Marijuana on Housing Values: Evidence from Colorado,” Economic Inquiry 56, no. 3 (July 2018): 1585–1601; and James Conklin, Moussa Diop, and Herman Li, “Contact High: The External Effects of Retail Marijuana Establishments on House Prices,” working paper, August 29, 2017.

66. Sarah Berger, “Colorado’s Marijuana Industry Has a Big Impact on Denver Real Estate: Report,” International Business Times, October 20, 2015.

67. “S&P CoreLogic Case-Shiller Home Price Indices,” S&P Dow Jones Indices, http://us.spindices.com/indices/real-estate/sp-case-shiller-co-denverhome-price-index/.

68. Johanna Catherine Maclean, Keshar M. Ghimire, and Lauren Hersch Nicholas, “Marijuana Legalization and Disability Claiming,” National Bureau of Economic Research Working Paper no. 23862, revised August 2020.

69. “Percent Change of Gross Domestic Product (CPGDPAI),” Economic Research, Federal Reserve Bank of St. Louis, https://fred.stlouisfed.org/series/CPGDPAI.

70. “Marijuana Tax Reports,” Colorado Department of Revenue, https://cdor.colorado.gov/data-and-reports/marijuana-data/marijuana-tax… Tax Reports,” Colorado Department of Revenue, https://cdor.colorado.gov/data-and-reports/marijuana-data/marijuana-tax….

71. Tom Wrobleski, “Up in Smoke: Colorado Pot Biz Not the Tax Windfall Many Predicted (Commentary),” Staten Island Advance, January 14, 2015.

72. Washington State Department of Revenue, “Recreational and Medical Marijuana Taxes,” https://dor.wa.gov/about/statistics-reports/recreational-and-medical-marijuana-taxes and www.502data.com/; and “Seeing Green: Washington Rakes in Revenue from Marijuana Taxes,” RT, July 13, 2015.

73. Joint Interim Committee on Marijuana Legalization, “Marijuana Tax Program Update,” Oregon Department of Revenue, May 23, 2016.

74. Benjamin Hansen, Keaton Miller, and Caroline Weber, “Federalism, Partial Prohibition, and Cross-Border Sales: Evidence from Recreational Marijuana,” Journal of Public Economics 187 (July 2020): 104159.

75. We follow Jeffrey Miron’s calculations in “The Budgetary Effects of Ending Drug Prohibition,” Cato Institute Tax and Budget Bulletin no. 83, July 23, 2018. The figures include state and local expenditures on police protection, corrections, and judicial and legal administration.