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Legalizing Cannabis in Colorado: Displacement or Market Expansion?
1 : Sciences Economiques et Sociales de la Santé & Traitement de lÍnformation Médicale
Institut de Recherche pour le Développement, Aix Marseille Université, Institut National de la Santé et de la Recherche Médicale
This paper examines how sales at medical marijuana centers in Colorado were affected by the opening of recreational marijuana stores in 2014, where any adult can purchase without the necessity of a doctor's recommendation. We exploit differences across counties in the availability of medical and recreational marijuana to examine whether the sales growth of recreational marijuana was at the expense of sales of medical marijuana or acted by expanding the overall legal market. Our findings suggest a statistically significant but economically modest amount of displacement (less than 10 percent), demonstrating that the legalization of recreational marijuana primarily expanded the legal market.
