The Effect of State Regulations and Consumer Demographics on Marijuana Revenue in Legalized States

Marijuana legalization is a controversial topic in the legal realm, with arguments both for and against recreational and medical use. States are given full discretion to legalize or ban the substance, the latter of which is still the popular choice, however, many states are slowly opening up to the idea of allowing widespread access to or, at a minimum, decriminalization of marijuana. With some states leading the charge toward full legalization just as recently as this year, little is known about the determinants of the revenue generated from marijuana sales after legalization. Using state level data post legalization, we examine the role of state-specific regulations and consumer demographics on marijuana sales in the legal market via a regression analysis. The results can be used to estimate the value of this industry in other states as well as the role legalization plays in the US economy as a whole. ; Professor Marc St-Pierre, Department of Economics