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Overregulation Drives Illegal Marijuana Market In Legal States, Study Suggests

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Excessive state regulations may be the reason illegal marijuana markets continue to exist after legalization, a new exploratory study found after looking at data from the first two U.S. states to end cannabis prohibition.

“The qualitative analysis of news reports reveals that regulation is one of the main reasons that people stay in the illicit market,” the paper states. “The comparison of marijuana crime trends in Colorado and Washington shows mixed findings. While marijuana offense rates in Colorado largely remained steady over the years, those in Washington increased dramatically after the implementation of more intensive regulations.”

Published in July, the research is the master’s thesis of Sikang Song, a graduate student of the criminology and criminal justice department at Portland State University.

Song writes that he was interested in understanding why the unregulated marijuana market persists in states where cannabis is legal. Since growers, sellers and consumers have “legitimate channels” to produce, trade and obtain cannabis, these illegal avenues should presumably diminish.

Yet research shows they haven’t disappeared altogether: Last year, one report found that 18 percent of cannabis consumers in California said they purchased marijuana products from an unlicensed seller.

For his analysis, Song investigated whether there’s an association between how intense state cannabis-related regulations are and the extent of the remaining illegal market. First, he reviewed news articles published between late 2013 to April 2019 featuring interviews with cultivators, sellers and consumers who shared the various reasons why they remain in the unregulated market. He then looked into whether marijuana arrest rates changed in the first two legal states after new sets of regulations were installed.

In Washington, he used June 2016 as the intervention point, and in Colorado, he used November 2015 and January 2017 as intervention points. (In 2017, for example, Colorado state lawmakers passed new rules regarding labeling and packaging of all containers holding marijuana flower and trim, concentrates and other products.)

According to the study, the reasons most people said they grew or sold marijuana illegally were “strict regulations and the high cost associated with the compliance.”

“Over two thirds of recording units (68%; n = 115) contain interviews and quotations from black market participants stating this reason,” the paper states. “Terms such as ‘overregulation,’ ‘cost of compliance,’ ‘high taxes’ are frequently used in the headlines and texts to describe ‘barriers’ for ‘small producers’ to enter the legal market or ‘drive’ them to the black market.”

Other reasons for staying in the illegal marijuana market included high taxes, market fluctuations and organized crime.

Using an interrupted-time series analysis, Song also found that Washington’s crime rate increased after the state introduced more regulations. “In 2014 and 2015, the marijuana crime rates per 100,000 residents were both at around 26,” he writes. “This number was increased to more than 28 incidents per 100,000 residents in 2016. In 2017, a total of 2,628 marijuana crimes were reported by law enforcement agencies in Washington, making the annual crime rates 35.96 per capita.”

Colorado, on the other hand, did not see any significant short- or long-term changes to its cannabis-related crime rates after the state implemented new marijuana regulations.

“Although the findings are not conclusive, the results of Washington data show that regulation intensity may be one of the main factors that influences or explains the persistence of illegal cannabis transactions after the legalization,” the study states. “The fact that Washington’s marijuana black market kept growing after the implementation of more complex and sophisticated regulations at least indicates a correlation between regulation intensity and the increase of the black market in the case of Washington.”

The fact that similar findings were not reported in Colorado, the study continues, suggests “the magnitude of illicit marijuana activities may be affected by regulation intensity in some states.”

Ultimately, the author points out, these results raise questions about “the possible adverse effect of intensive regulations to researchers and policy makers.”

If one of the goals in marijuana legalization is to eliminate the unregulated market, Song writes, it’s important for lawmakers to consider the implications of unnecessarily strict state rules. Instead, they should focus on creating an “equitable and accessible market that allows the coexistence of both large and small businesses.”

“The cost of compliance to regulations should be reduced to remove the barriers of establishing a legal marijuana business,” Song concludes, adding that “future policies should also pay more attention to cracking down [on] persistent illegal growers and sellers and organized crime groups who are unwilling to participate the legal market.”

Legalizing Marijuana Leads To Fewer Illegal Grow Sites In National Forests, Study Finds

Photo courtesy of Brian Shamblen.

Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.

Kimberly Lawson is a former altweekly newspaper editor turned freelance writer based in Georgia. Her writing has been featured in the New York Times, O magazine, Broadly, Rewire.News, The Week and more.

Business

Legal Marijuana States See Reduced Workers’ Compensation Claims, New Study Finds

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Legalizing marijuana for adult use is associated with an increase in workforce productivity and decrease in workplace injuries, according to a new study partly funded by the federal government.

In a working paper published by the National Bureau of Economic Research, researchers looked at the impact of recreational cannabis legalization on workers’ compensation claims among older adults. They found declines in such filings “both in terms of the propensity to receive benefits and benefit amount” in states that have enacted the policy change.

Further, they identified “complementary declines in non-traumatic workplace injury rates and the incidence of work-limiting disabilities” in legal states.

These findings run counter to arguments commonly made by prohibitionists, who have claimed that legalizing marijuana would lead to lower productivity and more occupational hazards and associated costs to businesses. In fact, the study indicates that regulating cannabis sales for adults is a workplace benefit by enabling older employees (40-62 years old) to access an alternative treatment option.

“We offer evidence that the primary driver of these reductions [in workers’ compensation] is an improvement in work capacity, likely due to access to an additional form of pain management therapy,” the study, which received funding from the National Institute on Drug Abuse, states.

The implementation of adult-use legalization seems to “improve access to an additional channel for managing pain and other health conditions, suggesting potential benefits on populations at risk of workplace injuries,” it continues.

The study is based on an analysis of data on workers’ compensation benefit receipt and workers’ compensation income from
2010 to 2018 as reported in the Annual Social and Economic Supplement of the Current Population Survey.

“Our results show a decline in workers’ compensation benefit propensity of 0.18 percentage points, which corresponds to a 20 percent reduction in any workers’ compensation income, after states legalize marijuana for recreational use. Similarly, we find that annual income received from workers’ compensation declines by $21.98 (or 20.5%) post-[recreational marijuana legalization]. These results are not driven by pre-existing trends, and falsification exercises suggest that observing estimates of this magnitude is statistically rare.”

Researchers said that they’ve found evidence that cannabis use increases post-legalization among the age cohort they studied, but no such spike in misuse. Further, they found a decline in post-legalization prescriptions for medications used to treat chronic pain, indicating that some people are using marijuana as a substitute for traditional painkillers.

“We hypothesize that access to marijuana through [recreational marijuana laws] increases its medical use and, in turn, allows better management of symptoms that impede work capacity—e.g., chronic pain, insomnia, mental health problems, nausea, and so forth,” the study says. “Chronic pain management is likely to be particularly important in our context as this is the health condition most commonly reported among medical marijuana users.”

Beyond decreasing workers’ compensation claims and costs, legalization also is a boon to the economy by adding jobs in legal states.

The cannabis industry added more than 77,000 jobs over the past year—a 32 percent increase that makes the sector the fastest in job creation compared to any other American industry, according to a report released by the cannabis company Leafly last week.

Starting A Business? Study Finds Marijuana May Help—And Hinder

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Starting A Business? Study Finds Marijuana May Help—And Hinder

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A new study out of Washington State University suggests cannabis may inspire entrepreneurs to come up with big, bold business ideas—but could also lead them down a rabbit hole of wishful thinking.

Researchers found that entrepreneurs who were frequent marijuana consumers came up with business pitches that were more original but less feasible, according to a panel of experts who scored the ideas.

“Beyond their innate creative aptitude, entrepreneurs may attempt to enhance their creativity,” says the study, which will appear in the March 2021 issue of the Journal of Business Venturing. “Despite generating more original ideas, we found that cannabis users’ ideas were less feasible.”

Also important variables, the study found, were an entrepreneur’s passion, which may heighten creativity at the expense of feasibility, as well as their past entrepreneurial experience, which tended to increase idea feasibility but rein in creativity.

The findings “provide insight into the creative benefits and detriments associated with being a cannabis user,” the study says, “suggesting that cannabis users—especially those who are passionate about exploring new venture ideas or those with relatively little entrepreneurial experience—may benefit from non-users’ insights to develop the feasibility of their ideas.”

To test the effects of marijuana on business-idea generation, researchers had 254 entrepreneurs come up with “as many new venture ideas as possible” based on virtual reality—a prompt provided by researchers. Participants had three minutes to generate ideas, then selected the idea they believed to be their best. Two “expert raters” then evaluated the chosen pitches for originality and feasibility.

Reachers say their findings support one of the study’s core hypotheses: that there are differences between how cannabis users and non-users arrive at business ideas. “Cannabis users are more impulsive, disinhibited, and better at identifying relationships among seemingly disparate concepts,” the study proposes. “However, these differences and cannabis users’ diminished executive functioning likely detracts from idea feasibility.”

Notably, the researchers did not ask participants to consume marijuana in the study setting itself. Rather, to compare cannabis-users to non-users, researchers split participants into two groups: those who had used marijuana less than five times in their lives and never in the past month (non-users) and those who’d consumed more than five times in their life and at least twice in the past month (users).

“Unlike alcohol, where health organizations have established standards for heavy drinking,” the study notes, “scholars have yet to reach a consensus on what constitutes a cannabis user versus a non-user.”

Because the study was merely observational, it also cannot determine whether marijuana use was in fact the cause of the differences between the two groups’ ideas. It may be that some other trait or traits explain both a person’s idea generation and their decision to consume cannabis.

The study’s cannabis user group comprised 120 people, or 47.2 percent of all participants. Researchers attempted to control for certain other factors, such as gender, age, education and technological familiarity.

While the findings suggest that, overall, cannabis can both inspire originality and limit feasibility, the outcomes were influenced strongly by what researchers described as “entrepreneurial passion for inventing” as well as their “entrepreneurial experience.”

“Cannabis users’ diminished idea feasibility compared to non-users was significant in those with low entrepreneurial experience,” the study’s authors wrote, “but not in those with high entrepreneurial experience.”

Similarly, “cannabis users’ lower idea feasibility was signifiant at high entrepreneurial passion for inventing but not low entrepreneurial passion for inventing,” the study found.

“Entrepreneurial passion for inventing appears to play a role in channeling cannabis users toward idea originality but away from idea feasibility,” it says. “Conversely, entrepreneurial experience appears to attenuate the positive relationship of being a cannabis user with idea originality and its negative relationship with idea feasibility.”

As the study itself acknowledges, many successful business leaders and visionaries have credited the inspirational powers of cannabis. Apple luminary Steve Jobs, for example, “noted that his use of cannabis helped him feel ‘relaxed and creative.’” (Biographer Walter Isaacson also quoted Jobs as saying another drug, LSD, was “one of the most important things in my life. … It reinforced my sense of what was important—creating great things instead of making money.”)

On the other hand, researchers argue that cannabis use can be a double-edged sword. “Regular cannabis use is associated with numerous detrimental effects, such as the potential for dependence and addiction, risk of motor vehicle accidents, mental and respiratory health problems, as well as memory and other cognitive impairments.”

Benjamin Warnick, assistant professor at Washington State University’s Carson School of Business and lead author of the study, said in a press release that the research is “the first study we know of that looks at how any kind of drug use influences new business ideation,” adding that “there is still much to explore.”

“Clearly there are pros and cons to using cannabis that deserve to be investigated further,” Warnick said. “As the wave of cannabis legalization continues across the country, we need to shed light on the actual effects of cannabis not only in entrepreneurship but in other areas of business as well.”

Best Music Playlists For Psychedelic Therapy Are Explored In New Johns Hopkins Study

Photo courtesy of the Drug Policy Alliance, Sonya Yruel

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Science & Health

Areas With More Marijuana Dispensaries Have Fewer Opioid Deaths, New Study Finds

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Increasing access to marijuana dispensaries is associated with a significant reduction in opioid-related deaths, according to a new study.

“Higher medical and recreational storefront dispensary counts are associated with reduced opioid related death rates, particularly deaths associated with synthetic opioids such as fentanyl,” the paper, published on Wednesday in the British Medical Association journal’s BMJ, concluded.

It’s a finding that “holds for both medical and recreational dispensaries,” the study says.

Researchers looked at opioid mortality and cannabis dispensary prevalence in 23 U.S.states from 2014 to 2018 and found that, overall, counties where the number of legal marijuana shops increased from one to two experienced a 17 percent reduction in opioid-related fatalities.

Increasing the dispensary count from two to three was linked to an additional 8.5 percent decrease in opioid deaths.

Further, the study found that this trend “appeared particularly strong for deaths associated with synthetic opioids other than methadone, with an estimated 21 percent reduction in mortality rates associated with an increase from one to two dispensaries.”

“If consumers use cannabis and opioids for pain management, increasing the supply of legal cannabis might have implications for fentanyl demand and opioid related mortality rates overall.”

“While the associations documented cannot be assumed to be causal, they suggest a potential association between increased prevalence of medical and recreational cannabis dispensaries and reduced opioid related mortality rates,” the researchers wrote. “This study highlights the importance of considering the complex supply side of related drug markets and how this shapes opioid use and misuse.”

This is far from the first piece of research to draw a connection between legal cannabis access and reduced harms from opioids. Multiple studies have found that marijuana effectively treats conditions like chronic pain for which opioids are regularly prescribed, and surveys show that many patients have substituted addictive painkillers with cannabis.

“Cannabis is generally thought to be a less addictive substance than opioids,” the new study says. “Cannabis can potentially be used medically for pain management and has considerable public support.”

“Given the alarming rise in the fentanyl based market in the US, and the increase in deaths involving fentanyl and its analogs in recent years, the question of how legal cannabis availability relates to opioid related deaths is particularly pressing.”

“Our findings suggest that increasing availability of legal cannabis (modeled through the presence of medical and recreational dispensary operations) is associated with a decrease in deaths associated with the T40.4 class of opioids, which include the highly potent synthetic opioid fentanyl,” it continues. “This finding is especially important because fentanyl related deaths have become the most common opioid related cause of death.”

Earlier this month, a separate study determined that medical cannabis use is associated with significant reductions in dependence on opioids and other prescription drugs, as well as an increase in quality of life.

These studies could also provide valuable context to a federal health agency in the U.S. that is conducting a review of studies to learn if marijuana and kratom could potentially treat chronic pain with fewer side effects than opioids.

Hawaii Could Legalize Psychedelic Mushroom Therapy Under New Senate Bill

Photo courtesy of WeedPornDaily.

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