Cannabis consumers' preferences for legal and illegal cannabis: evidence from a discrete choice experiment

In U.S. states that legalized and commercialized recreational cannabis, cannabis sales in illegal markets are still sizable or even larger than those in legal markets. This study aimed to assess cannabis consumers' preferences for purchasing cannabis from legal and illegal markets and estimate the trade-offs under various policy scenarios.

963 adults were recruited, who used cannabis in the past year and lived in a state with recreational cannabis legalization. In a discrete choice experiment, participants chose purchasing cannabis from a legal dispensary or an illegal dealer with varying levels in product attributes including quality, safety, accessibility, potency, and price. Mixed logit models were used to analyze preferences.

The likelihood of choosing legal cannabis increased with a higher quality, the presence of lab test, a shorter distance to seller, a higher tetrahydrocannabinol level, and a lower price. The likelihood of choosing illegal cannabis increased with a higher quality, a shorter distance to seller, and a lower price. Among product attributes, quality and accessibility were perceived to be the most important for legal cannabis and price was perceived to be the most important for illegal cannabis. Policy simulations predicted that improving quality, ensuring safety, allowing delivery services, increasing dispensary density, and lowering prices/taxes of legal cannabis may reduce illegal cannabis market share.

In the U.S., cannabis consumers' preferences for illegal cannabis were associated with both legal and illegal cannabis product attributes. Policies regulating legal cannabis markets should consider potential spillover effects to illegal markets.