Cannabis Legalization Increases Heroin Prices, Study Finds

Changes in state recreational cannabis laws can have a significant knock-on effect on the illegal market for other drugs, claims a new study from researchers at Weill Cornell Medicine and the Instituto Tecnológico Autónomo de México.

The study, published in the journal Addiction, utilized crowdsourced data on street drug prices and reports of law enforcement seizures over the past 15 years to study whether the legalization of recreational cannabis in a particular state would result in any noticeable variations. The analysis uncovered noticeable increases in the prices of other drugs, including heroin and oxycodone, following legalization. Law enforcement seizures for cannabis and other drugs also fell.

The researchers say that their findings highlight the need for more research into the dependent relationship between cannabis legalization and other illicit drug markets, in order to determine the exact motivators behind these market changes.

Cannabis legalization can impact other illicit drug markets

To study the associations between recreational legalization and street drug prices, potency, quality, and related law enforcement seizures, the researchers pooled together data from a variety of different databases.

Street cannabis prices from 2010-to-2019 were taken from the crowdsourcing website Price of Weed, and street prescription drugs data from the same time period were drawn from StreetRx. Data on other illegal drug prices from 2006-to-2019 were taken from the Drug Enforcement Agency’s (DEA) System to Retrieve Information on Drug Enforcement (STRIDE), which collects data on price and potency reported by undercover DEA officers. Law enforcement action data were recorded from the 2007-to-2019 DEA National Forensic Laboratory Information System.

Collectively, the researchers compiled information on illicitly sold methamphetamine, cocaine, heroin, oxycodone, hydrocodone, morphine, amphetamine, and alprazolam. After matching this data against the date of state recreational cannabis legalization and comparing it against other states with no law changes, the researchers identified the following responses in the local illicit markets:

• 9.2 percent decrease in street/illegal cannabis prices.
• 19.5 percent decrease in low-quality street/illegal cannabis prices.
• 64 percent increase in heroin prices.
• 54 percent increase in heroin potency.
• 7.3 percent increase in street/illegal oxycodone prices.
• 5.1 percent increase in street/illegal hydrocodone prices.
• 93 percent decrease in law enforcement seizures of street/illegal cannabis
• >50 percent decrease in law enforcement seizures of heroin, oxycodone, and hydrocodone

“Our exploratory findings suggest that markets for illegal drugs may not be independent of legal cannabis market regulation,” said lead author Dr Angélica Meinhofer, assistant professor of population health sciences at Weill Cornell Medicine, in a statement.

“As more states move towards legalization and additional post-RCL [recreational cannabis law] implementation data become available, we’ll need to do more research to determine whether recreational cannabis laws cause those changes in the illegal market and what happens in the long-term.”

Why does this happen?

While the researchers call for more research to properly characterize the relationship between cannabis policy and illicit market forces, they propose some simple hypotheses to explain their observations in this study.

The reduction in cannabis prices can be mostly explained by legal recreational cannabis reducing the demand for street cannabis, they say, specifically for low-quality street cannabis products. The price reduction might also be due, in part, to the reduced risk of enforcement action against illicit cultivators, as law enforcement struggles to differentiate between legal and illegal products.

The increase in street opioid prices would appear to be down to an unrelated similar increase in heroin potency. However, the researchers also note that a shrinking illicit cannabis market could mean that illicit opioid suppliers are increasing prices to make up for their own extra expenses; average costs will be lower for illicit suppliers who diversify across various different drugs.

As expected, the legalization of cannabis led to a significant decrease in cannabis-related law enforcement actions. However, it is more complex to explain why cannabis legalization has also resulted in a decrease in enforcement actions for other drugs. The researchers recognize that the nature of their data set makes it impossible to suggest real mechanisms behind this, but hypothesize that a decrease in cannabis searches has also meant a fall in the number of cases where somebody was searched for cannabis and other drugs were also found.

Studying the effects of cannabis legalization on other illicit drug markets will have important consequences for social welfare and for future policy decisions, the researchers conclude. Policymakers responsible for implementing recreational cannabis laws should endeavor to anticipate responses in the illicit market and plan a proportionately stringent or relaxed regulatory approach.