Will legalization reduce youth marijuana use?

Rates of teen marijuana use in Canada are among the highest in the world. Legalization advocates blame high use on criminalization: "the ready availability from dealers with no scruples about targeting youth, and the cachet of forbidden fruit—or rather, buds." Indeed, the first objective of the Canadian federal government's marijuana legalization agenda is to "Protect young Canadians by keeping marijuana out of the hands of children and youth.

Yet can legalization actually reduce youth marijuana use?

A basic supply and demand analysis can help clarify the issues. The diagram below shows stylized marijuana supply and demand curves. Because the market is competitive, the supply price is cost-driven: it reflects the marginal costs of producing and distributing marijuana, including the expected costs of any criminal penalties associated with drug trafficking. 

The legalization-reduces-youth-drug-use argument goes like this: taxing cannabis, plus imposing strict penalties on those who distribute drugs to youth, will increase the price of marijuana. Public health campaigns emphasizing the risks of marijuana use will dampen the demand. The net impact will be to reduce marijuana use:

 

Unfortunately, this pleasing scenario is unlikely to come to pass. It will be difficult to impose high taxes on recreational marijuana use. Because medical marijuana is untaxed, if the taxes on recreational use are too high, people will find an excuse to switch to medicinal products. This is not merely a hypothetical possibility: in Colorado, medical marijuana sales volumes are larger now than they were immediately post-legalization  (based on data found here). 

Second, marijuana is not that difficult to grow (though it's not that easy, either - see the threads in this 420 forum). If marijuana taxes are too high, people will evade the taxes by switching to home grown. The level of taxation that the recreational marijuana market will bear is unknown, but my betting is that the after-tax price of legal marijuana will be closer to the price of beer than to the price of single malt whiskey.

What about the argument that legalization will drive unprincipled drug traffickers out of business and, with only legitimate enterprises selling pot, it will be easier to control sales to minors?  One piece of evidence on the effect of age restrictions on consumption comes from the alcohol market, and is summarized by Kitt Carpenter and Carlos Dobkin in this ungated paper (see p. 147 onwards). Their estimates suggest that age prohibitions are associated with roughly a 10 to 20 percent reduction in use. So, for example, 20 year olds, who can't legally purchase alcohol in the US, drink roughly 10 to 20 percent less than those just over the legal drinking age.

So, yes, age restrictions do dampen use, but the impacts are not large. Public health campaigns might also discourage use. Set against this, however, is that legalization of recreational marijuana, together with capital investment, is leading to innovation, new product development, and branding. Take, for example, a high-end boutique product such as Mr Moxey's CDB Ginger Mints. It's an edible, there's no more of that potentially embarrassing trying-to-inhale-without-coughing business. Indeed, the ginger and mint in Mr Moxey's leaves your breath smelling fresh. It's a branded, which means (one hopes), that it is a known quantity; a reliable product. There's no need to worry about getting bad quality or adulterated weed. Moreover innovative growing and processing practices are allowing producers to isolate particular cannabinoids. For example, Mr Moxey's mints have high concentrations of CDB (the "body high" with analgesic, anti-inflammatory, and anti-anxiety properties), and relatively less THC (the more psychoactive cannabinoid that produces a "stoned" feeling). The availability of high quality, reliable products would be expected to shift demand outwards, counteracting the effect of public health campaigns and age restrictions.

One additional complicating factor is that, if marijuana was legalized, and capital investment was able to flow into the industry, scale economies could lead to significant reductions in production costs, shifting the supply of marijuana to the right. Another complication is that, if marijuana use was legalized, shifting social norms could lead to an upwards trend in use. Marijuana wouldn't just be for the stoner kids hanging out in the smoke pit anymore - and as it became more mainstream, more people might be tempted to use it.

In sum, it is hard to predict the impact of marijuana legalization on youth consumption. But if I had to guess, I would expect  the net effect of all of the factors above to be something like this:

Any reductions in consumption by current users would be offset by the entry of new users attracted by better quality, more reliable, safer products. However there is simply not enough empirical evidence to know for sure what the impact of legalization on youth consumption will be. This paper finds that legalization of medical marijuana increases adolescent drug use, this paper finds that easier marijuana access is associated with use at a younger age, but this paper found that teenage use decreased when medical marijuana was legalized. 

 Even if decriminalization is associated with increased use, does this mean that marijuana legalization is a bad thing? No. Consumption is not the same thing as harm. It is possible for youth marijuana consumption to go up and the harms associated with youth marijuana use to go down if youth are using products more moderately, and are using better quality products. Moreover, even if marijuana is harmful, policies to restrict marijuana use are also harmful - like imprisoning people. But these are complex issues, and beyond the scope of this post. The point here is simply to unpack the claim that legalization will decrease marijuana use among teens.

Comments

[Lord]

It is often a question of alternatives. If not this than what? Not an easy question.

[Frances Woolley]

Lord: "If not this than what?"

Agreed, it's difficult. The harms caused by incarceration is a subject for another post - I don't think that's the answer. The Kitt Carpenter paper is worth reading, as it gives a reasonably clear statement of the argument "yes, drugs are harmful, but they are enjoyable to consume and that counts for something." Notice that in the picture where drug consumption goes up, better quality pot products mean that demand shifts to the right, implying that consumer surplus is higher. Increased consumer surplus is definitely a key part of the case for legalization - though I don't think it makes such a good soundbite as "keep drugs out of the hands of children and youth."

[Felipe]

I don't know how to express this on a supply/demand chart, but I think the most powerful argument in favor of "decrease use" would be that legalization would mean lower supply cost, but only for adults. Before legalization the expected payoff from selling go a minor is equal to that of selling to an adult. This ceases to be the case after legalization, as there a (potentially very large) cost associated with minors. Therefore, rational suppliers would prefer to "specialize" in the adult only market. Note that this does not rely on suppliers being unprincipled or not.

[Frances Woolley]

Felipe - "Therefore, rational suppliers would prefer to "specialize" in the adult only market."

However remember that, if legalization occurred, larger-scale producers who are able to produce a high- and consistent-quality product under controlled conditions are likely to dominate the adult market. Also only larger-scale producers are going to be able to establish brand names and produce those yummy edibles. Your local grower with a dozen or so plants in their attic or basement is really going to struggle to compete for legal market share. I think there's an equally plausible story that says "existing growers of dubious-quality weed will turn to the teen market place because it's the one place they can sell their product."

Also it isn't that hard to get an older brother/sister/friend to buy for you. And the unprincipled can very easily make money buying Mr Moxey's mints and selling them to teens. That's one of the things with marijuana - it's so compact, and that makes it way easier to hide from parents. And edibles are way easier to consume at home than marijuana cigarettes - that fact alone changes the marijuana marketplace considerably.

[Mike]

I wonder how much of the current illegal teen marijuana consumption is as a substitute for the harder to acquire alcohol? I'm thinking the effort to acquire alcohol vs drugs might be a more significant cost to kids than would a few dollars up or down in the per gram price. I wonder if anyone has estimated how much marijuana consumption is the result of alcohol prohibition?

[Frances Woolley]

Mike: "I wonder if anyone has estimated how much marijuana consumption is the result of alcohol prohibition?"

It's tricky, because legal drinking ages are correlated with drug policy in general. E.g. looking at Canada v. the US, you'd think that alcohol prohibition actually decreases cannabis use, but that's because there are different drug policy regimes in the two countries. E.g. in Canada I've never heard of someone having to submit a urine sample for a drug test before starting a professional job - I don't even know if that would be legal - but I do know that happens in the U.S.

I certainly have heard the marijuana-is-easier-and-cheaper-to-get than alcohol story, and I believe it. But I'm not convinced that legalization will change that, in part because the basement growers will still have plants and know-how, but won't be able to enter the legal market place because they won't be able to make the capital investment necessary to grow a high and consistent quality product. Another reason marijuana is appealing as something to sell to teens is its size and convenience. It would be super-easy to buy edibles legally at a pot shop, and then resell them at the local high school. It's much harder to do that for booze because booze is just so bulky and heavy. It clinks in kids' backpacks. Or breaks. Or smells.

[Mike]

I've been thinking of it as being more like alcohol, but from what you are saying it sounds more like cigarettes when I was a kid. There was a prohibition but not tightly controlled and people who participated in the trading of cigarettes weren't viewed as drug dealers. Meaning more people participated in the supply side because there wasn't a social stigma attached to it.

[Frances Woolley]

Mike - I do think the tobacco example is instructive. And I don't know how effective age restrictions on tobacco use are - there should be some studies on that.

[Oliver]

A serious post, but somehow it makes me giggle.

Mr Moxey's mints have relatively (...) less THC (the more psychoactive cannabinoid that produces a "stoned" feeling). Not buying that, then...

What do studies from the Netherlands say? It's the only country in Europe to have broadly legalised pot for quite some time.

[Frances Woolley]

Oliver - "What do studies from the Netherlands say?"

One of the studies cited in the post is based on Netherlands data - it finds being near a pot shop is associated with starting using earlier.

One of the things about the Netherlands, though, as I understand it, is that it's only the distribution that's legal - i.e. stuff is legal when it goes out the front door, but not when it comes in the back. So that may be why the Netherlands didn't see the rapid development of edibles that we've seen in Colorado and Washington - actually growing and manufacturing marijuana is still a bit of a legal grey zone there.

[Tel]

It seems very unlikely that you can convince consumers of an illegal product that they should pay more money to obtain the additional enjoyment of being taxed. There's something totally wrong with that logic.

The idea of "imposing strict penalties on those who distribute drugs to youth" seems kind of ridiculous because it's prohibited already. Perhaps you are suggesting that having a tax incentive will motivate enforcement efforts?

[Frances Woolley]

Tel: "The idea of "imposing strict penalties on those who distribute drugs to youth" seems kind of ridiculous because it's prohibited already. Perhaps you are suggesting that having a tax incentive will motivate enforcement efforts?"

Legalization does make new penalties possible for those who distribute drugs to youth, e.g. people could have their licence to sell weed taken away.

I wasn't suggesting that tax incentives will motivate enforcement efforts, but it's an interesting idea. Also one could argue that targetting all enforcement efforts towards one goal - eliminating teen and child use - will be more effective in curtailing youth use than the current haphazard approach.

But, yeah, I am inclined to agree with your first point - that's why I don't think marijuana taxation has huge revenue-raising potential.

[Donald A. Coffin]

It mostly depends on haw legalization proceeds and how it is regulated. Chief among the regulatory issues (as it has been with alcohol, which, in my opinion, is currently a vastly more harmful drug than marijuana). Licensing producers, restricting locations (and hours of operations) of retailers, and (perhaps most of all) how heavily it is taxed all play into he issue of use/abuse. Further, as we have not (at least in the US with respect to alcohol, or other currently illegal drugs) done in any organized or well-supported system of helping abusers stop. Frankly, I'd almost prefer continued non-legal status than under-regulated and under-taxed legalization without treatment for those who seek it.

[Frances Woolley]

Donald - thanks for those comments. Yup, "marijuana is no worse than alcohol" is a fairly low bar.

As you probably know, in parts of Canada governments have monopolies, or quasi-monopolies, over the retail sale and/or the wholesale distribution of alcohol, and there is some interest in extending those monopolies to the marijuana market. But as my colleague Jean Daudelain has suggested to me, this puts the government in a real conflict of interest situation - anything that really significantly reduces alcohol consumption is going to cut into government revenue. Hence abusers - even here where we think don't do that untested faith-based-initiatives thing that our southern neighbour does - are told "Why don't you go to Alcoholics Anonymous".

But I've been told the control of medical marijuana is so loose that we're close to a minimal tax, high availability, no enforcement equilibrium - which I don't think is a really great regime. Certainly Toronto is full of newly opened dispensaries.

[Oliver]

marijuana is no worse than alcohol

On that subject, I think there definitely is a difference. Both are drugs, both, unlike tobacco, cause a high, both may be addictive but marijuana is much more psychoactive. This is particularly a problem for youths with a predisposition for things like schizophrenia, even if they keep to a 'recreational dosis'. And it is also youths who are most likely to be out for the 'stoned' experience as opposed to just a 'body high'. So, while possibly not very significant in terms of total numbers (I don't know), possible mental disorders are all the more serious when they do occur. And that problem seems to be less pronounced in the case of alcohol.

[Frances Woolley]

Oliver - I totally agree with you about the psychoactive dangers of marijuana, especially for youth - and the usage rates among Canadian teens are really high. On the other hand, see this old post http://worthwhile.typepad.com/worthwhile_canadian_initi/2016/01/is-alcohol-as-harmful-as-tobacco.html for a discussion of the emotional harm associated with alcohol abuse.

But to a certain extent this then takes us back to the discussion around Donald Coffin's comments - if we all agree the ultimate goal is harm minimization, what's the answer? I don't know if you've been in downtown Toronto recently, but there are dispensaries popping up all over the place.

[Oliver]

Yes, I remember that post. Those are mostly long term effects you cite, though. My point was that there is also serious risk even from short term use, a different category of risk, so to speak. But it's difficult to compare one kind of risk to another, I guess.

I don't know the answer. I've never been to Toronto. I've been to the Netherlands and on the face of it it doesn't seem to be a complete stoner's wasteland. I hear they have had trouble associated with the illegal drug trade that's still behind their 'coffee shops'.

Here in Switzerland we've had various experiments with open drug use. Most famously here in Zurich from 1985 - 95. Meanwhile there's an extensive methadone and heroin programme for addicts that is apparently quite successful.

Pot has gone through various stages of repression. For a while there were shops popping up everywhere, first only with seeds and then later with produce and there were large plantations south of the alps. They cracked down on that, obviously feeling it was growing out of control. Now it's only legal to grow, own and consume small amounts. Production and distribution for commercial purposes are illegal.

A careful but pragmatic approach seems to be the best, imo.