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Cost of ‘Cannabis-crime’ Offset by Sales Revenue, Study Finds

Dec 05, 2019

Cost of ‘Cannabis-crime’ Offset by Sales Revenue, Study Finds

In Colorado, it seems cannabis-related crime doesn’t just pay – it pays tax.

A new study has found that streets with recreational dispensaries in Denver experienced significantly higher levels of property crime since cannabis sales were legalized in 2014. However, the costs of these crimes were largely nullified by the dispensaries’ sales revenues.

The researchers found that for every dollar lost with the rise in property crime, Denver dispensaries generated more than $309 in sales revenue and almost $13 in tax.


The cost of crime

Using data from the Denver Police Department, the researchers measured changes in the levels of violent, disorder, drug, and property crime from the three-year period before recreational cannabis was legalized (2011-2013) against the three-year period after (2014-2016).

Of the 186 street segments in Denver that opened a recreational marijuana dispensary, the team from the City University of New York (CUNY) noted an 18.8 percent increase in property crime compared to segments of streets without dispensaries.

“The increase in nonviolent crimes must be a consideration when assessing the legalization of recreational marijuana,” said Nathan Connealy, a CUNY doctoral student who led the study.

After comparing the costs of criminal justice, victim cost, and total crime cost with the local sales and tax revenue generated by Denver's cannabis market, Connealy and his team found that the dispensaries’ sales alone outweighed the cost of the property crime boost.

“The significant revenue these dispensaries generated in Denver may lead other jurisdictions to ask whether the public will tolerate increases in nonviolent crime given the potential monetary benefits of legalizing recreational marijuana,” he wrote in a press statement.

When it came to other offences, the study, published in the Justice Evaluation Journal, found that streets with recreational dispensaries saw no changes in violent, disorder, and drug crime. Areas adjacent to dispensaries did see higher levels of drug and disorder crimes, but these increases weren’t deemed statistically significant.

Streets with and adjacent to medical cannabis dispensaries saw no significant changes in any type of crime.

More data, more dollar

While the CUNY authors found the jump in property crime rates near dispensaries to be significant, other researchers may have their doubts.

Another study assessing marijuana’s effect on crime rates recently concluded that although incidences of property crime had jumped in Colorado, the increase wasn’t significant.

“Property crime rates increased temporarily after the legalization, and aggravated assaults also temporarily increased in Washington,” Ruibin Lu, an assistant professor of criminal justice at Stockton University and that study’s first author, told Analytical Cannabis in October.

“And if we look at a long term, the changes [that] occurred in Washington [and] Colorado are not significantly different from the changes [that] occurred in other parts of the country.”

The CUNY researchers also note that the study has its limitations. Any unreported crimes couldn’t be analysed, and the study’s conclusions are ultimately relevant to Denver and may not be applicable to other legal jurisdictions considering legalization.


Leo Bear-McGuinness

Science Writer

@LeoMcBear

Leo joined Analytical Cannabis in 2019. From research to regulations and analysis to agriculture, his writing covers all the need-to-know news for the cannabis industry. He holds a bachelor's degree in biology from Newcastle University and a master's degree in science communication from the University of Edinburgh.

 

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