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The Cross-Border Spillover Effects of Recreational Marijuana Legalization

Zhuang Hao, Benjamin Cowan

NBER Working Paper No. 23426
Issued in May 2017, Revised in October 2017
NBER Program(s):Health Economics, Law and Economics

We examine the spillover effects of recreational marijuana legalization (RML) in Colorado and Washington on neighboring states. We find that RML causes a sharp increase in marijuana possession arrests in border counties of neighboring states relative to non-border counties in these states. RML has no impact on juvenile marijuana possession arrests but is rather fully concentrated among adults. Using separate data on self-reported marijuana use, we show this is accompanied by an increase in use in neighboring states relative to non-neighboring states. We do not find conclusive evidence that marijuana sale/manufacture arrests, DUI arrests, or opium/cocaine possession arrests in border states are affected by RML.

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Document Object Identifier (DOI): 10.3386/w23426

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