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Principal Investigator: Ce Shang
Organization: OHIO STATE UNIVERSITY
Fiscal Year: 2024
Award: $657,484
Funding agency: National Institute on Drug Abuse
Project Summary
Fifteen states and the District of Columbia have legalized marijuana products for non-medical use, making them
accessible to one-third of the US population. Despite having therapeutic effects, marijuana use leads to a wide
range of adverse physical and mental effects. Based on approaches to regulate alcohol and cigarettes, imposing
excise taxes on retail marijuana is among the most effective policies to mitigate related harmful public health
consequences. However, the retail marijuana market is still in its infancy, and state and local authorities have
knowledge gaps on how to best design excise tax structures (i.e., rates and bases) to reduce harms. Unlike
cigarette and alcohol markets where standard products dominate, marijuana products come in different forms
and various tetrahydrocannabinol (THC) levels, which consequently pose different levels of harm. Therefore,
there are multiple factors to consider when setting tax structures for retail marijuana. Taxes could be based on
weight, price, or potency. A weight basis has the advantage of raising prices equally to prevent switching to
lower-priced products but may fail to reduce THC consumption by not targeting potency. Conversely, because
more potent THC products are priced higher, price and potency bases may have the advantage of imposing
higher taxes on products with higher THC levels but may fail to put effective price barriers on less potent, lower-
priced products that would deter initiation. Further, marijuana prices decrease over time after legalization, calling
for frequent increases in tax rates to sufficiently raise prices. It is unclear whether existing tax rates are set
properly in response to this decreasing price trend. As such, which tax rates are applied to which bases will
significantly alter prices and relative prices by product form and potency level, thereby influencing marijuana use
and health outcomes. The tax structure design for retail marijuana is further challenged by the illegal market,
which is often used as an argument against raising marijuana excise taxes. We lack empirical evidence indicating
the extent to which excise tax structures drive consumers to the illegal market and how this may undermine the
effectiveness of tax policies in reducing marijuana use and harms. Project goal: To evaluate how excise tax
structures impact marijuana consumption and product choices among different marijuana forms and between
legal and illegal products. This project will innovatively integrate state-of-the-art choice experiments and natural
experiments to identify the impacts of tax structures on THC consumption and product choices. Aim 1: Examine
the impact of excise tax rates for retail marijuana on marijuana use and product choices. Aim 2: Examine the
impact of tax bases (weight, price, potency) on marijuana initiation and consumption. Aim 3: Evaluate the overall
THC consumption and market share shifts from legal to illegal markets under different excise tax structures for
retail marijuana using calibration. Results will have critical policy implications that inform how to set tax structure
to mitigate harms for states contemplating excise taxation policies as they legalize, and states and localities with
legal sales contemplating reforms to their current tax structures.
Terms: <21+ years old><9-ene-Tetrahydrocannabinol><Address><Adult><Adult Human><Age><Alcohol Chemical Class><Alcohols><Blossoms><Border Crossings><Calibration><Cannabis><Cannabis retail><Cigarette><Consumption><D.C. Washington><D9-tetrahydrocannabinol><DC Washington><Delta-9-Tetrahydrocannabinol><District of Columbia><Effectiveness><Flowers><Goals><Harm Minimization><Harm Reduction><Health><Intention><Knowledge><Legal><Link><Marijuana><Marketing><Methods><Modeling><NIDA><National Institute of Drug Abuse><National Institute on Drug Abuse><Natural experiment><Outcome><Participant><Persons><Plant Blooms><Policies><Policy Maker><Population><Predisposition><Price><Probability Samples><Process><Psyche structure><Public Health><Reporting><Sales><Structure><Survey Instrument><Surveys><Susceptibility><THC co-use><THC use><Taxation><Taxes><Tetrahydrocannabinol><Tetrahydrocannabinol co-use><Tetrahydrocannabinol use><Therapeutic Effect><Time><Weight><Youth><Youth 10-21><adult youth><adulthood><ages><authority><base><bases><cannabis legalization><cannabis market><cannabis marketplace><cannabis use><cannabis user><cohort><delta(1)-THC><delta(1)-Tetrahydrocannabinol><delta(9)-THC><delta(9)-Tetrahydrocannabinol><design><designing><experiment><experimental research><experimental study><experiments><infancy><infantile><innovate><innovation><innovative><interest><legal marijuana><legalized cannabis><legalized marijuana><marihuana><marijuana legalization><marijuana retail><marijuana use><marijuana use reduction><marijuana user><mental><non-medical use><nonmedical use><policy implication><preference><prevent><preventing><pricing><prospective><reduce marijuana use><reduction in marijuana use><response><sell cannabis><sell marijuana><trend><weights><young adult><young adulthood><Δ(1)-THC><Δ(1)-tetrahydrocannabinol><Δ(9)-THC><Δ(9)-tetrahydrocannabinol><Δ-9-tetrahydrocannabinol><Δ9-tetrahydrocannabinol>