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Is Legal Pot Crippling Mexican Drug Trafficking Organizations? The Effect of Medical Marijuana Laws on US Crime

Author

Listed:
  • Gavrilova, Evelina

    (Dept. of Business and Management Science, Norwegian School of Economics)

  • Kamada, Takuma

    (Division of Behavioral Science, Graduate School of Arts and Letters, Tohoku University)

  • Zoutman, Floris

    (Dept. of Business and Management Science, Norwegian School of Economics)

Abstract
We examine the effect of medical marijuana laws (MML) on crime treating the introduction of MML as a quasi-experiment and using three different data sources. First, using data from the Uniform Crime Reports, we find that violent crimes such as homicides and robberies decrease in states that border Mexico after MML are introduced. Second, using Supplementary Homicide Reports' data we show that for homicides the decrease is the result of a drop in drug-law and juvenile-gang related homicides. Lastly, using STRIDE data, we show that the introduction of MML in Mexican border states decreases the amount of cocaine seized, while it increases the price of cocaine. Our results are consistent with the theory that decriminalization of small-scale production and distribution of marijuana harms Mexican drug trafficking organizations, whose revenues are highly reliant on marijuana sales. The drop in drug-related crimes suggests that the introduction of MML in Mexican border states lead to a decrease in their activity in those states. Our results survive a large variety of robustness checks. Extrapolating from our results, this indicates that decriminalization of the production and distribution of drugs may lead to a drop in violence in markets where organized crime is pushed out by licit competition.

Suggested Citation

  • Gavrilova, Evelina & Kamada, Takuma & Zoutman, Floris, 2015. "Is Legal Pot Crippling Mexican Drug Trafficking Organizations? The Effect of Medical Marijuana Laws on US Crime," Discussion Papers 2015/5, Norwegian School of Economics, Department of Business and Management Science.
    • Handle: RePEc:hhs:nhhfms:2015_005
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    File URL: http://hdl.handle.net/11250/274522
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    Cited by:

    1. Natasha Burns & Andrew Keithley & Kristina Minnick & Mia L. Rivolta, 2022. "When in Rome: Local social norms and income differences," The Financial Review, Eastern Finance Association, vol. 57(3), pages 457-484, August.
    2. Meehan, Brian & Rusko, Corey J. & Stephenson, E. Frank, 2020. "(Pot)Heads in Beds: The Eect of Marijuana Legalization on Hotel Occupancy in Colorado and Washington," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 50(1), May.
    3. Carrieri, Vincenzo & Madio, Leonardo & Principe, Francesco, 2019. "Light cannabis and organized crime: Evidence from (unintended) liberalization in Italy," European Economic Review, Elsevier, vol. 113(C), pages 63-76.
    4. Jörg Kalbfuß & Reto Odermatt & Alois Stutzer, 2018. "Medical marijuana laws and mental health in the United States," CEP Discussion Papers dp1546, Centre for Economic Performance, LSE.
    5. Hansen, Benjamin & Miller, Keaton & Weber, Caroline, 2020. "Federalism, partial prohibition, and cross-border sales: Evidence from recreational marijuana," Journal of Public Economics, Elsevier, vol. 187(C).
    6. Carrieri, Vincenzo & Madio, Leonardo & Principe, Francesco, 2020. "Do-It-Yourself medicine? The impact of light cannabis liberalization on prescription drugs," Journal of Health Economics, Elsevier, vol. 74(C).
    7. Auriol, Emmanuelle & Mesnard, Alice & Perrault, Tiffanie, 2023. "Weeding out the dealers? The economics of cannabis legalization," Journal of Economic Behavior & Organization, Elsevier, vol. 216(C), pages 62-101.
    8. d'Este, Rocco & Harvey, Alex, 2020. "Universal Credit and Crime," IZA Discussion Papers 13484, Institute of Labor Economics (IZA).
    9. Lucas Marín Llanes & Hernando Zuleta, 2022. "Myths of drug consumption decriminalization: effects of Portuguese decriminalization on violent and drug use mortality," Documentos CEDE 20328, Universidad de los Andes, Facultad de Economía, CEDE.
    10. Rocco d'Este, 2021. "Breaking the Crystal Methamphetamine Economy: Illegal Drugs, Supply‐side Interventions and Crime Responses," Economica, London School of Economics and Political Science, vol. 88(349), pages 208-233, January.
    11. Dragone, Davide & Prarolo, Giovanni & Vanin, Paolo & Zanella, Giulio, 2019. "Crime and the legalization of recreational marijuana," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 488-501.
    12. Anderson, D. Mark & Rees, Daniel I., 2021. "The Public Health Effects of Legalizing Marijuana," IZA Discussion Papers 14292, Institute of Labor Economics (IZA).
    13. Alex Hollingsworth & Coady Wing & Ashley C. Bradford, 2022. "Comparative Effects of Recreational and Medical Marijuana Laws on Drug Use among Adults and Adolescents," Journal of Law and Economics, University of Chicago Press, vol. 65(3), pages 515-554.
    14. Hunt, Priscillia E & Pacula, Rosalie Liccardo & Weinberger, Gabriel, 2018. "High on Crime? Exploring the Effects of Marijuana Dispensary Laws on Crime in California Counties," IZA Discussion Papers 11567, Institute of Labor Economics (IZA).
    15. Brett Hollenbeck & Kosuke Uetake, 2021. "Taxation and market power in the legal marijuana industry," RAND Journal of Economics, RAND Corporation, vol. 52(3), pages 559-595, September.
    16. Chu, Yu-Wei Luke & Townsend, Wilbur, 2019. "Joint culpability: The effects of medical marijuana laws on crime," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 502-525.
    17. Jha, Chandan Kumar & Joshi, Swarup, 2023. "Municipal bankruptcies and crime," International Review of Financial Analysis, Elsevier, vol. 89(C).
    18. Ignacio Hernández-Rodríguez & Israel Estrada-Camacho & Sergio Montes, 2024. "Analysis of Psychotropic Substance Seizures Occurring in 2017–2022 in Tamaulipas, a Mexican Border State with USA," Social Sciences, MDPI, vol. 13(10), pages 1-12, October.
    19. Ken Yahagi, 2022. "Regulation on coexisting legal and illegal markets with quality differentiation," European Journal of Law and Economics, Springer, vol. 53(2), pages 235-259, April.

    More about this item

    Keywords

    Cannabis Legalization; Decriminalization; Crime;
    All these keywords.

    JEL classification:

    • H00 - Public Economics - - General - - - General
    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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