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U.S. State approaches to cannabis licensing.

Lucy Xiaolu Wang1, Nicholas J Wilson2

  • 1Department of Resource Economics, University of Massachusetts Amherst, Amherst MA 01002, United States; Max Planck Institute for Innovation and Competition, Marstallplatz 1, Munich 80539, Germany; Canadian Centre for Health Economics, 155 College Street, Toronto, ON M5T 3M6, Canada.

The International Journal on Drug Policy
|June 12, 2022
PubMed
Summary

States license medical cannabis more restrictively than adult-use cannabis. Earlier implementation of medical cannabis laws (MCLs) and recreational cannabis laws (RCLs) correlates with more accessible licensing.

Keywords:
Adult-use cannabisCannabis legalizationLicensingMedical cannabisRationing

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Area of Science:

  • Public Health
  • Cannabis Policy Research
  • Business Regulation

Background:

  • U.S. states exhibit diverse cannabis business licensing strategies amid federal prohibition.
  • Limited research exists on cross-state variations in cannabis licensing approaches.

Purpose of the Study:

  • To systematically analyze and compare cannabis business licensing strategies across U.S. states.
  • To identify patterns in license categories, costs, and issuance volumes.
  • To explore the influence of policy implementation timelines, state ideology, and taxation on licensing.

Main Methods:

  • Comprehensive data collection on cannabis business licenses in all states with MCLs/RCLs.
  • Analysis of license metrics including categories, cost, and volume.
  • Consideration of policy implementation timing, qualitative aspects, state ideology, voting preference, and taxation data.

Main Results:

  • Medical cannabis licensing is generally more restrictive than adult-use licensing (fewer categories, higher cost, lower volume, vertical integration).
  • States with earlier MCL/RCL implementation offer more license categories, at lower costs, and in higher volumes.
  • No clear link was found between state ideology/voting preference and licensing policy.

Conclusions:

  • Cannabis licensing policies vary significantly across states, with medical cannabis often facing stricter regulations.
  • The timing of medical cannabis law (MCL) and recreational cannabis law (RCL) implementation impacts licensing accessibility.
  • State ideology does not appear to be a primary driver of current cannabis licensing structures.