By reducing the perceived risk of federal prosecution for legal producers in compliance with state law, the Ogden Memo should have increased benefits to patients by increasing medical marijuana availability. The Cole Memo should have had the opposite effect. If supply-side factors are an important determinant of the relative value of medical marijuana participation, then the federal memos may have influenced patient take-up through their effects on medical marijuana access. The magnitude of these effects will depend on the regulatory framework for legal production established by state MML policy. To measure medical marijuana participation, I collected data on the number of registered medical marijuana patients for all states with mandatory registration programs as of 2014. The full listing of data sources for each state — which include direct contact with state officials, state department reports and websites , academic papers, and local news articles — is provided in Appendix A-. This paper uses monthly data from 1999-2014, and Table 1.2 presents count tabulations of data availability by year and state. The measure of interest is the registration rate, calculated as the percent of the resident adult population registered as medical marijuana patients.As shown in Table 1.2, data availability on registered patient counts varies across states. Some states provide monthly statistics, while others collect data quarterly or annually. For states with smaller registration programs , administrative records were not made available and had to be collected from older news articles and archived web pages. For states with more developed registration systems, statistics could be found starting from the program’s inception, but the frequency of data collection increased substantially following the Ogden Memo in 2009. For months with missing data,cannabis equipment registered patient counts were linearly interpolated using the two closest months of data.
This new dataset presents the most comprehensive state panel of medical marijuana participation made available as yet. The solid line in Figure 1.2 plots the total number of individuals registered as medical marijuana patients from 1997-2014 in states that required patient registration. As the data show, registered patient counts were relatively flat during the period of federal intervention from 1997-2008, but the Ogden Memo led to a rapid increase in medical marijuana patient participation. The spike in patient take-up coincided with significant growth in the number of legal medical marijuana producers. According to estimates by Sevigny et al. , from 2008-2010 the number of medical marijuana dispensaries increased from around 1,400 to 3,800, and the number of legal producers grew from less than 20,000 to almost 90,000.As shown in Figure 1.2, medical marijuana participation stalled following the Cole Memo. Patient registration rates resumed growth in mid-2013 when Deputy Attorney General James Cole released a second memorandum re-clarifying that federal enforcement resources should focus on large-scale marijuana operations only if they are suspected of engaging in certain criminal activities such as trafficking across states lines, distributing to minors, and supporting cartels . While the aggregate data suggest that these federal memos significantly affected trends in medical marijuana participation, the magnitude of these changes varied widely across states. To illustrate this variation, Figure 1.3 graphs trends in adult per capita patient registration rates for states with effective registry dates prior to 2010. Some states saw exponential growth in registration rates following the Ogden Memo and declines in registered patient counts at the time of the first Cole Memo. Other states show an up-tick in patient registration with the Ogden Memo but appear to have been relatively unaffected by the Cole Memos. Finally, a few states have seen relatively flat trends in medical marijuana participation since program enactment. Summary statistics for the variables used in this paper’s regression analysis are presented in Table 1.3.
Columns and show the mean and standard deviation in monthly medical marijuana registration rate data and for the other included control variables in the models. Column presents the standard deviation across state averages, such that comparing columns and indicates how much of the data variation comes from differences across versus within states. Several policy variables are included in P oljt. Supply-related regulations include a dummy variable for whether state-licensed dispensaries were legalized, and a variable for the laxness of caregiver restrictions equal to 1 if caregivers could grow for an unlimited number of patients, equal to 0.5 if they could grow for multiple patients but faced production limits, and equal to 0 if they could grow for zero or only one patient. A dummy variable for whether the state had decriminalized marijuana is included to reflect the relative risk of arrest for marijuana possession should a patient not register. To capture the relative cost of obtaining a doctor’s recommendation, I include a variable equal to one if chronic pain was allowed as a qualifying condition, equal to0.5 if chronic pain was allowed as a qualifying condition with certain restrictions, and equal to 0 if chronic pain was not allowed as a qualifying condition. Finally, continuous variables for medical marijuana possession limits and registration fees are also included. Table 1.5 examines the effects of the Ogden and Cole Memos, controlling for specific state MML regulations. Since Table 1.3 shows many of these policies are time-invariant within states, specifications control for year but not state fixed effects. From columns and , the significant effects of the Ogden and Cole Memos hold even when controlling for changes in state-specific regulations. Consistent with the predictions of section 1.3, laxer restrictions on suppliers, lower costs for qualifying, and higher possession limits are associated with significantly higher medical marijuana participation. Having a decriminalization law and higher registration fees are associated with significantly lower take-up. Columns and of Table 1.5 allow the effects of specific state MML regulations to vary with time since the Ogden and Cole Memo announcements.
The effects of the Ogden and Cole Memos alone lose significance. Allowing pain as a qualifying condition also significantly increases medical marijuana participation, but it has no differential effect following the Ogden and Cole Memos. This suggests that benefits associated with increased legal availability are an important determinant of medical marijuana patient participation, and that legal production increased in response to the Ogden Memo most in states that did not impose strict capacity constraints on legal suppliers.These findings suggest that the effects of the federal memos on medical marijuana suppliers was an important driver of patient registration. For Colorado,vertical grow shelf there is sufficient data to disaggregate registered patient counts by those patients with and without a designated caregiver. For Colorado, Figure 1.4 shows that, indeed, the most substantial growth in registered patient counts was seen by patients reporting a primary caregiver as their source of marijuana; similarly, the Cole Memo led a larger reduction in registered patient counts among patients with caregivers compared to patients without caregivers. Figure 1.5 provides further evidence that interest in medical marijuana flows from producers to patients. The graph shows quarterly data for Google search interest in the phrases “how to become a patient” and “how to become a caregiver.” Data was collected from Google Trends, which measures relative search interest over time for these phrases from a sample of total searches. The spike in search interest for becoming a caregiver occurs at the time of the Ogden Memo, and it clearly precedes that of search interest in becoming a patient. This suggests that producers responded more rapidly to the announcement effects of the Ogden Memo than users, and is consistent with evidence that incentives to obtain information about a program are influenced by the expected net benefit of participating . To assess the relative role of supply and demand in driving medical marijuana patient registration, ideally one would have detailed state-level time series data on potency-adjusted marijuana prices. Unfortunately, since marijuana remains illegal at the federal level, accurate price data is highly limited. The most widely used data on marijuana prices comes from two data sources. High Times is an online magazine where users can submit the price they paid for their last marijuana purchase. The magazine reports individual price submissions by city and strain of cannabis. Priceofweed.com is a website that collects user-submitted data in real-time on the price of marijuana purchases and classifies them into “high”, “medium”, or “low” quality.
For completeness, I present evidence based on this crowd-sourced data, but they are intended only as suggestive evidence and should be interpreted with caution. Table 1.6 presents estimates for the effects of registration rates on the natural log of price per ounce of high-potency marijuana. For the regressions, data on high quality marijuana prices was aggregated at the state-quarter level and converted to price-per-ounce. Outlying price values were dropped.The results from Table 1.6 show that increases in registration rates significantly predict lower prices. This suggests that, even if higher medical marijuana participation rates to some extent reflect increased demand, they reflect even larger effects on supply. A number of studies have exploited state-time variation in the enactment of MMLs to estimate their effects on marijuana use in the general population. Findings have varied substantially, with estimates ranging from significantly negative, to statistically insignificant, to significantly positive for an excellent review. However, the standard difference-in-differences approach employed in these studies implicitly assumes that the “treatment effect” of MML enactment is dichotomous, i.e. the policy change occurs at a specified date, and it is implemented completely and equally across states. Whether this assumption holds will depend on the mechanisms by which MMLs induce changes in behavior. According to deterrence theory, by reducing the perceived severity of legal or informal sanctions associated with marijuana consumption, MML enactment should ceteris paribus increase demand. Since the passage of MMLs provided similar legal protections and represented a shift in either governmental or social acceptance of marijuana, ex-ante these effects should occur simultaneously with law enactment and be similar across states. This prediction relies on three conditions: that the statutory policy change is actually implemented, that no offsetting changes in enforcement occur simultaneously, and that the public is aware of the change in policy . Since MMLs provide protection from state-level but not federal prosecution, citizens may be even less likely to update their expectations about potential prosecution until it is observed or known that the federal government will not intervene. Since awareness about laws and enforcement policies will be diffused through social networks, personal experience, and the mass media, the federal memos and their coverage by the media and marijuana advocacy groups may have had far greater effects on public perception than MML enactment alone. To provide suggestive evidence that knowledge about MMLs was limited prior to the Ogden Memo, Table 1.7 presents state-representative data on MML awareness from the National Survey of Drug Use and Health , which starting in 2002, asked respondents the following: “In your state, has marijuana been approved for medical use?” Table 1.7 reports cross-sectional variation in the percent of youths and adults who responded “yes” to this question, comparing the 2008-2009 and 2010-2011 for each state with an MML prior to 2009.18Although these are not causal effects, they provide some useful insights. The first striking feature of Table 1.7 is the wide range of awareness across MML states. Oregon was the only state in 2008-2009 where over half of adult respondents correctly reported that the state had an MML. In contrast, less than 18% of adults in Nevada correctly responded that their state had an MML. On average, youths aged 12-17 are less aware of MML existence, but there is similar variation across states. The share of adolescents correctly reporting their state had an MML in 2008-2009 ranged from 25% in Vermont to 47% in Oregon. This variation in awareness is not explained by differences in how long the MML has been in effect. Also of note is the substantial increase in awareness of MML status following the Ogden Memo for Colorado, Montana, and Michigan. In two years, the share of adults who correctly responded that their state law allowed for the use of medical marijuana nearly doubled. These states also show the largest increase in awareness among youths. From Tables 1.1 and 1.5, these were also states with MMLs allowing caregivers to serve multiple patients and experiencing the greatest growth in medical marijuana patient participation following the Ogden Memo.