The Grass is Greener on the Other Side: How Extensive is the Interstate Trafficking of Recreational Marijuana?

61 Pages Posted: 6 Sep 2017  

Benjamin Hansen

University of Oregon - Department of Economics; NBER; IZA

Keaton Miller

University of Oregon

Caroline Weber

University of Oregon - Department of Economics

Date Written: August 2017

Abstract

Marijuana is partially prohibited: though banned federally, it will soon be available to almost 1 in 4 U.S. adults under state statutes. A chief concern among policy makers is marijuana trafficking from states with legal markets elsewhere. We measure trafficking with a natural experiment. Oregon opened recreationally licensed stores on October 1, 2015, next to Washington where stores had been legally selling recreational marijuana since July, 2014. Using administrative data covering the universe of recreational market sales, we find Washington retailers along the Oregon border experienced a 41% decline in sales immediately following Oregon's market opening. In counties that are the closest crossing point for the majority of the neighboring population, the estimated decrease grows to 58%, and is the largest for the biggest transactions. We also test if these inter-state spill-overs led to health externalities by studying traffic accidents in Oregon from 2011-2015.

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Suggested Citation

Hansen, Benjamin and Miller, Keaton and Weber, Caroline, The Grass is Greener on the Other Side: How Extensive is the Interstate Trafficking of Recreational Marijuana? (August 2017). NBER Working Paper No. w23762. Available at SSRN: https://ssrn.com/abstract=3031733

Benjamin Hansen (Contact Author)

University of Oregon - Department of Economics ( email )

1285 University of ORegon
Eugene, OR 97403
United States

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Keaton Miller

University of Oregon ( email )

1280 University of Oregon
Eugene, OR 97403
United States

Caroline Weber

University of Oregon - Department of Economics ( email )

Eugene, OR 97403
United States

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