NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Caroline Weber

University of Oregon
Department of Economics
1285 University of Oregon
Eugene, OR 97403-1285
Tel: 5413464677

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org

NBER Working Papers and Publications

August 2017Drug Trafficking Under Partial Prohibition: Evidence from Recreational Marijuana
with Benjamin Hansen, Keaton Miller: w23762
The use of marijuana is banned federally yet the substance will soon be available to 21% of the United States population under state laws. This regime of partial prohibition creates the potential for externalities created by states with legal markets. Indeed, a chief concern among local and national policy makers is the trafficking of marijuana produced legally in one state to other states. We measure, for the first time, this extent of this trafficking. We use a natural experiment: Oregon began allowing recreational marijuana sales on October 1, 2015, after Washington, its neighbor, began allowing sales on July 8, 2014. Using comprehensive administrative data on the universe of Washington sales, we find that Washington retailers along the Oregon border experienced a 41% decline in sales i...
July 2017The Taxation of Recreational Marijuana: Evidence from Washington State
with Benjamin Hansen, Keaton Miller: w23632
The median United States voter supports the legalization of marijuana, at least in part due to a desire to increase state tax revenues. However, states with legal markets have implemented wildly different regulatory schemes with tax rates ranging from 3.75 to 37 percent, indicating that policy makers have a range of beliefs about industry responses to taxes and regulation. We examine a policy reform in Washington: a switch from a 25 percent gross receipts tax collected at every step in the supply chain to a sole 37 percent excise tax at retail. Using novel, comprehensive administrative data, we assess responses to the reform throughout the supply and consumption chain. We find the previous tax regime provided strong incentives for vertical integration. Tax invariance did not hold, with som...
 
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