An Empirical Exploration of the Effects of Medical Marijuana Laws

This exploration into the multiple effects of medical marijuana laws on regional marketplaces uses a novel data set and contributes three unique and important findings. First, in states with medical marijuana legislation the price of marijuana is significantly lower than states without similar legislation, this is likely due to measures that allow for legalized avenues of production and distribution. Secondly, because of price breaks for bulk purchases, retail level distributers operate on a downward sloping supply curve that is less steep in medical marijuana states; this is likely due to decreased risk of distribution which may reduce preference for lower margin, higher volume transactions. Finally, in states with medical marijuana laws, variance in purchase price is substantially less, presumably due to the decreased cost of information seeking and decreased risk of advertisement