NZ Initiative's Eric Crampton says California had a 22-year start on us in terms of using medical marijuana and it's time for cannabis reform here too

By Eric Crampton*

There is a lot to be said for America’s federal structure. Fifty different states each trying different things not only lets policy better suit local preferences, but also helps researchers figure out the effects of different policies.

As New Zealand slowly starts considering that maybe, just maybe, marijuana prohibition has done far more harm than good, we can look to America for lessons about legalisation.

California legalised marijuana for medicinal use in 1996. Alaska, Oregon and Washington state followed suit in 1998. Today, medical marijuana is legal in 29 states plus Washington, DC. In New Zealand, Sativex, a marijuana-derived product, is available by prescription, but accessing non-pharmaceutical grade cannabis is not simple. American medical marijuana more typically means the ability to take a prescription to a registered dispensary and bring home your preferred strain.

Colorado and Washington state moved to allow legal recreational use of marijuana in 2012. Alaska, Oregon and Washington DC followed in 2014, and California, Maine, Massachusetts, Nevada and Vermont joined them in 2016.

In Washington, production, sale, possession and consumption of marijuana was legalised for adults over the age of 21 – the American minimum legal drinking age for alcohol. Today, the state imposes a 37% tax at the retail level – a high tax rate relative to other states that have legalised. Local jurisdictions in Washington receive some of the revenue from marijuana taxes, if they allow cannabis firms to enter the market. As we know from experience in New Zealand, local government can always choose to put in rules making it very difficult to open bars and bottleshops. Since they do not share in the revenue from alcohol excise, some councils’ hostility is easy to understand. Washington’s decision to share the excise tax revenue then makes a lot of sense.

Producers, processors and retailers are separately licensed, with a seed-to-sale product traceability system to prevent diversion into the black market. And researchers have even had access to the state’s database, which includes testing for potency.

Because medical marijuana and recreational marijuana rolled out slowly across American states, researchers have been able to do some rather interesting work looking at the effects of legalisation. Typical methods will compare states before- and after- legalisation, and compare that difference to what happened in other states that did not legalise.

Looking across the range of studies, the broad conclusion is that prohibitionists’ fears failed to materialise. There has been no increase in traffic accidents. There has been no increase in youth uptake of marijuana. There has been no increase in use of harder drugs – the usual ‘gateway’ hypothesis. Across the broad range of fears raised by prohibitionists, the most typical conclusion in the literature was that there really wasn’t any effect.

Let’s walk through the studies.

First up, traffic accidents. Driving while under the influence of marijuana is less risky than driving while drunk, but riskier than driving while sober. If legalisation meant that a lot of people flipped from driving sober to driving while stoned, then the accident rate could have increased. But if it meant instead that people shifted from driving while drunk to driving while stoned (or not driving at all while under the influence), the accident rate could have decreased. What happened?

Hansen, Miller and Weber tested the effects of legalisation on traffic accidents by looking at areas near the Washington-Oregon border. Washington legalised before Oregon, and so there was a lot of cross-border sales. When Oregon finally legalised, Washington retailers nearest the main north-south crossing-points saw sales decreases of about 58%. A lot of Washington product had flowed down into Oregon. The researchers used that to test the effects of marijuana legalisation on accident rates. Oregon counties far from the Washington border had less access to marijuana before Oregon legalised, while those close to the Washington border had ready access. And so, after Oregon legalised, you could compare accident rates in counties that had not previously had quite as easy of access with those that had had ready access prior to legalisation.

The researchers found no evidence consistent with legalisation increasing traffic accident rates. If anything, there might have been a decrease in accidents as people switched from alcohol to marijuana.

Driving while stoned is bad. But the Oregon evidence suggests that marijuana legalisation does not increase traffic accident rates. That conclusion mirrors the finding in prior work by Anderson, Hansen and Rees. Those researchers found an 8-11% drop in traffic fatalities, and a bigger drop in traffic fatalities involving alcohol, in the first year after a state legalises medical marijuana. This could either be due to people switching from alcohol to marijuana, or it could be due to people being more likely to use medicinal marijuana while at home since public use remained prohibited. Since the later work in Oregon suggested a drop in traffic accidents with legalisation of recreational use more broadly, it seems less likely that home-use restrictions on medicinal marijuana can take credit.

Next up, the children. Won’t somebody think about the children? It has never seemed plausible that prohibition particularly discourages youths from using marijuana. A dealer of illegal drugs will not care about his clients’ ages unless there are sufficiently higher penalties for selling to children than for selling to adults though licensed retailers care about keeping their licenses. But, again, it is an empirical question. Legalisation could normalise or de-stigmatise marijuana use and could consequently increase youth uptake. Did it happen?

No. Anderson, Hansen and Rees showed that medicinal marijuana laws, if anything, led to a slight decrease in youth uptake of marijuana. Sarvet et al’s later metastudy looked across eleven different studies of adolescent marijuana use and found no support for the idea that legal medicinal marijuana encourages youth uptake.

How about marijuana as a gateway drug – or as substitute for other drugs? Victoria University of Wellington’s Luke Chu showed that medical marijuana laws did increase overall marijuana consumption, but also resulted in a 20% drop in medical admissions for heroin-related treatment, with no effect on cocaine. By that measure, marijuana access reduced use of harder drugs.

And Powell et al’s recent study showed that medical marijuana laws reduced opioid mortality rates. Opioids have become a scourge in much of rural America, with abuse of Oxycontin being rampant. But access to medicinal marijuana dispensaries cut opioid overdose rates by about a quarter. And, in the earlier period when regulation around dispensaries was less tight, the reduction in opioid mortality rates was even higher.

How about liberalisation more broadly?

Angela Dills, Sietse Goffard and Jeff Miron look across the range of liberalisations to check effects on 132 different outcomes reported in surveys of high school students. Overall, they find no effect. Medical marijuana laws and legalisation improved 8 outcomes and worsened 9. Decriminalisation significantly improved 20 outcomes while worsening 4. When 132 different outcomes are tested across a range of different types of policy, a lot will wind up being statistically significant just by chance. The authors suggest that the ‘no effects’ finding is not particularly surprising where kids were hardly prevented from accessing marijuana by prohibition, and that further liberalisation is unlikely to have dramatic effects.

But the jury is still out on full legalisation of recreational marijuana use. Too few states have fully legalised for too short a period. Even in Washington State, where the 2012 election legalised recreational marijuana, access to legal product did not really start until 2014.

I think we can draw a couple of rather safe conclusions from America’s experiment.

First up, New Zealand could immediately adopt a much more liberal regime around prescriptions for marijuana. Medical marijuana has been around in America for a very long time now and does not seem to have resulted in any of the nightmare scenarios that prohibitionists warn against. The only thing that medical marijuana might be a gateway towards is full legalisation of recreational marijuana down the track.

On full recreational legalisation, it is harder to draw conclusions. It is harder to tell what the longer term effects on youth uptake might be, or on use overall. It has not been legal yet for long enough in enough states to really be able to tell. But it would be surprising if there were any large effects other than reducing the burden on police and on those who would otherwise be saddled with a criminal record.

We might listen to Washington state’s King County Sheriff’s Department, which put out a statement on the five-year anniversary of the vote to legalise recreational marijuana use. The statement read, “Drug use among teens over all is down. The retail marijuana shops do not cause significant amounts of increased crime. We aren’t arresting for misdemeanour marijuana anymore, which takes a huge burden off the criminal justice system.”

New Zealand likes to see itself as a leader in progressive social reform, or at least a fast follower. But America is leaving us in its dust, with Canada close behind them. It is remarkable that half of America, even under President Trump, is taking a far more liberal approach to drug law than we are in New Zealand.

America ran the experiment on medical marijuana, and California now has a 22-year head-start on us. It’s time for cannabis reform here too

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*Eric Crampton is the chief economist at The New Zealand Initiative, which provides interest.co.nz with a fortnightly column.