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Cannabis Policy

This is a writeup of a shallow investigation, a brief look at an area that we use to decide how to prioritize further research.

In a nutshell

  • What is the problem? Our impression is that despite the spread of efforts to legalize recreational cannabis use, there is currently relatively little discussion of which legislation models are best for public health. We believe ineffective regulation may carry substantial public health costs.
  • What are possible interventions? A philanthropist could fund research into different legalization models and their effects, or could support increased discussion between advocates of cannabis legalization and public health experts with experience in policy related to intoxicants.
  • Who else is working on it? A number of foundations do some work on cannabis policy, often within the broader area of drug policy. We are not aware of any major funders who are focusing on designing cannabis policy with a view to protecting public health.

Published: April 2016

What is the problem?

Since 2012, four U.S. states have legalized recreational use and commercial production of cannabis.1 Broadly speaking, we consider it likely that the number of states where recreational cannabis consumption is legal will continue to increase. This view is based on conversations with drug policy experts,2 increased support for legalization in national polls,3 and our general impressions of the current political climate in the U.S.

As discussed below, we believe that different ways of legalizing cannabis use are likely to have widely varying public health implications. In this investigation, we focused on these potential public health effects; we did not thoroughly consider other potential effects of legalization, including (for example) effects on arrests or incarceration. We chose to focus on this aspect because we see the question of how to legalize in a public-health-friendly way as receiving significantly less attention than the question of whether or not to legalize. We see the former question as potentially very important if legalization efforts continue to succeed (which we find likely).

Public health effects of commercial cannabis production

Our understanding is that the public health impacts of cannabis legalization are likely to depend on the specifics of how legalization is carried out. However, our impression is that relatively little is known about how different kinds of regulatory regimes are likely to affect public health.

We believe that it could be especially important for early-moving states to implement well-designed policy, as we consider it likely that later legalization models will be based on earlier ones (i.e. we expect the form that legalization takes overall to be relatively path dependent). Another consideration in favor of careful policy design early on is that it may be difficult to change existing policies once states have legalized cannabis, especially if, for example, a commercial marijuana industry were to emerge and become established.4

An example of how policy design might affect public health is the extent to which cannabis is allowed to be produced commercially. Legalization models that enable cannabis production to be fully commercialized may cause cannabis prices to drop considerably; we have heard estimates that prices under commercialization might be one tenth or less of current prices.5 Such a price change seems likely to lead to increased consumption of cannabis.

In general terms, we expect increased consumption of intoxicants (like cannabis) to have humanitarian costs both for individuals and for society. In addition, our impression is that cannabis specifically can cause harm in a number of known ways. In this investigation, we focused on cannabis dependence as the main relevant harm. Cannabis dependence is associated with a variety of negative effects, including low energy and motivation; relationship and family problems; financial difficulties; and sleep and memory problems.6

Size of the problem

As part of our investigation, we estimated how much harm could potentially be averted by well-designed legislation. See footnote for more details of the calculation.7 In summary:

  • We assumed that the main harms of sub-optimal legalization would be due to increased cannabis dependence, then used our best guesses of how harmful dependence is, and how much it might increase under full commercialization, to estimate what the difference between well- and badly-designed legislation might be.

  • About 18 million people in the U.S. use cannabis at least once per month.
  • About 7% of these, or 1.25 million people, meet criteria for what we would consider morally-relevant cannabis dependence (although other sources report 12% have “met criteria for cannabis dependence in the past year”).
  • We use an estimated disability weight for cannabis dependence of 0.05 (note that this is lower than the Global Burden of Disease study’s disability weight for cannabis dependence, which is 0.329).
  • The estimates we’ve seen suggest that if legalization were accompanied by full commercialization (and therefore much lower prices), cannabis consumption would roughly double.
  • We assumed that a doubling in consumption would correspond to a doubling in dependent users.

Combining these figures with a cost of $50,000 per disability adjusted life year (DALY), the cost of full commercialization comes out at roughly $3 billion, although we have very limited confidence in this estimate. This is relatively low compared to our rough estimates of the importance of other cause areas within U.S. policy.

What are possible interventions?

We have focused our attention on ways to help cannabis legalization go as well as possible in jurisdictions where it does take place (rather than focusing on affecting the likelihood of legalization itself, which we see as drawing more attention from funders).

Different legalization models could vary along many dimensions, including the following:8

  • What type of organizations are allowed to provide cannabis?
  • What regulations apply to these organizations?
  • What types of products can be sold?
  • How much will the products cost?

A funder in this space might consider supporting:

  • Research into different legalization models and their effects, e.g. analyzing previous instances of legalization, forecasting the effects of new proposals, or developing new legislative approaches.
  • Increased communication between cannabis legalization advocates and public health experts, e.g. holding meetings to discuss different approaches to legalization.

Work of this kind could affect cannabis policy in the short term (e.g. by affecting the language of a specific ballot initiative) or the longer term (e.g. by promoting effective models of regulation which can be adopted more widely in the future, or more generally shifting the discourse around cannabis policy).

Who else is working on this?

We do not have a comprehensive picture of which organizations actively support the careful design of cannabis-related policy, as opposed to supporting drug policy reform or cannabis legalization efforts in general. Our impression is that not many groups focus on this aspect of cannabis reform.

The Open Society Foundations (OSF) funds some work on cannabis policy as part of its broader program of domestic drug policy reform but our understanding is that this is not a focus area for OSF.9 A number of other funders, including the Drug Policy Alliance, the Riverstyx Foundation, and the Libra Foundation, fund advocacy around improving drug policy more broadly, but do not focus on cannabis policy specifically as far as we know.10

Questions for further investigation

If we were to do further research here, questions we might aim to address include:

  • How responsive will legalization advocates be to proposed measures to protect public health?
  • What policy designs can best capture the benefits of cannabis legalization while preventing large declines in prices and attendant increases in dependence?
  • How does legalizing cannabis affect alcohol consumption patterns and their associated social costs?

Our process

We have been interested in this area for several years. We have had many conversations with experts on the topics of criminal justice reform and drug policy reform, some of which have also included discussion of cannabis legalization. Public notes are available from several of these conversations:

This area is also a personal interest of Cari Tuna and Dustin Moskovitz, co-founders of the foundation Good Ventures, who have made several personal gifts to support cannabis legalization efforts. Cari and Dustin are members of the Open Philanthropy Project Board of Managers.

The Open Philanthropy Project has made grants to support the following:

We are not currently planning further grants in this area in the near future, but may revisit the issue once we have a clearer sense of whether these grants have been successful.


Budney et al. 2007Source (archive)
Burns et al. 2013Source (archive)
Caulkins 2013Source (archive)
Caulkins 2014aSource (archive)
Caulkins 2014bSource (archive)
Caulkins et al. 2012Source (archive)
Caulkins et al. 2015Source (archive)
GiveWell’s non-verbatim summary of a conversation with Open Society Foundations, November 19, 2012Source
Global Burden of Disease Study 2010Source (archive)
Mackin, Martin and McGavin 2007Source (archive)
NIDA - Cocaine, Scope of UseSource (archive)
NIDA - DrugFacts, Treatment StatisticsSource (archive)
NIDA - Marijuana, Is Marijuana AddictiveSource (archive)
Office of National Drug Control Policy, State Laws Related to MarijuanaSource (archive)
Our non-verbatim summary of a conversation with Andy Ko, November 20, 2013Source
Our non-verbatim summary of a conversation with Open Society Foundations, November 19, 2012Source
Our non-verbatim summary of conversations with Gara LaMarche on May 22, May 31, and June 14, 2013Source
Our non-verbatim summary of conversations with Mark Schmitt on May 22 and June 14, 2013Source
Pew Research Center 2015Source (archive)
SAMHSA 2014Source (archive)
  • 1.

    “Marijuana legalization is a controversial and multifaceted issue that is now the subject of serious debate. Since 2012, four U.S. states have passed ballot initiatives to remove prohibition and legalize a for-profit commercial marijuana industry.” Caulkins et al. 2015, pg. xi.
    (This quote is taken from a report to the Vermont legislature on options for marijuana legalization, which was funded by the Open Philanthropy Project.)

    We note that state legalization laws do not affect the fact that cannabis use is illegal under Federal law. From Office of National Drug Control Policy, State Laws Related to Marijuana: “It is important to recognize that these state marijuana laws do not change the fact that using marijuana continues to be an offense under Federal law.”

  • 2.

    • Our non-verbatim summary of conversations with Mark Schmitt on May 22 and June 14, 2013: “The effort to legalize marijuana is an interesting example of what a five year philanthropic advocacy effort can look like. While it may be too early to tell how it will end, it’s interesting that things changed so suddenly after decades of stagnant attitudes. George Soros funded some legalization advocacy groups and helped them grow in the 1990s. Ethan Nadelmann at the Drug Policy Alliance would be a good source for understanding where the philanthropic funding has mattered most. It would be interesting to know if anyone actually picked out Colorado and Washington ahead of time when predicting breakthroughs.”
    • Our non-verbatim summary of conversations with Gara LaMarche on May 22, May 31, and June 14, 2013: “Drug policy has become more of a mainstream issue in recent years. When George Soros started the Drug Policy Institute as a think tank in the 1990s, it was the only significant organization working on this issue. It was a controversial area to work on and policy change seemed far off.

      Medical marijuana has changed the face of the issue somewhat. The feeling toward drug policy among communities of color has changed because of the war on drugs and the resulting high number of black men going to prison for marijuana offenses.”

  • 3.

    “Public opinion about legalizing marijuana, while little changed in the past few years, has undergone a dramatic long-term shift. A new survey finds that 53% favor the legal use of marijuana, while 44% are opposed. As recently as 2006, just 32% supported marijuana legalization, while nearly twice as many (60%) were opposed.”
    Chart and quote from Pew Research Center 2015, pg. 1

  • 4.

    “And there may be wisdom in moving incrementally. States that jump all the way to the commercial version of legalization will have a hard time stepping back to a nonprofit or co-op model. Once a legal industry becomes entrenched, and has lobbying clout, it will be very hard to uproot. Likewise, a state monopoly model, favored by many experts, will only become an option after national legalization if there is not already an established commercial interest that would fight it. Unless voters are certain that they want for-profit businesses to control the marijuana trade, it would make sense to legalize the industry with one of these intermediate models, at least at first.” Caulkins 2014a

  • 5.

    “Production costs today are high because growing is done by two entities: criminal organizations, whose comparative advantage is avoiding enforcement, not practicing agronomy; and by plant-loving aficionados supplying medical dispensaries and other high-end markets from artisanal operations. A decade or so down the road, when the for-profit marijuana farming sector approaches the efficiency of tomato or pepper farmers, the production cost for a joint’s worth of basic, high-potency intoxicant, which runs about $4 today, will drop to about a nickel.

    The challenge under a system of legal availability is therefore not achieving greater efficiency and lower prices but, rather, keeping prices from falling too far, since low prices are not good for public health.” Caulkins 2014a

  • 6.

    “Adults seeking treatment for marijuana abuse or dependence average more than 10 years of near-daily use and more than six serious attempts at quitting (Budney, 2006; Copeland et al., 2001; Stephens et al., 2002). They continue to smoke the drug despite social, psychological, and physical impairments, commonly citing consequences such as relationship and family problems, guilt associated with use of the drug, financial difficulties, low energy and self-esteem, dissatisfaction with productivity levels, sleep and memory problems, and low life satisfaction (Gruber et al., 2003; Stephens et al., 2002). Most perceive themselves as unable to stop, and most experience a withdrawal syndrome upon cessation.” Budney et al. 2007, pg. 4

  • 7.

    • In our calculation, we focused on harms caused by cannabis dependence. Our impression is that this is likely to represent the bulk of possible harms from legalization.

    • About 18 million people in the U.S. have used cannabis at least once in the past month. (Burns et al. 2013, Figure 3, pg. 5)
    • Of these, 12% have met criteria for cannabis dependence in the past year (Burns et al. 2013, Table 1, pg. 3), although this may include cases that don’t represent morally relevant harm as we would define it. The proportion who we believe are likely to be cannabis dependent in a highly morally relevant sense is more like ~7% (approximately 1.25 million people), based on the following figures from Caulkins 2014b, Table 1, pg. 10:
      • 8% “tried to set a limit but failed to keep it”.
      • 7% “tried to cut down but failed to do so”.
      • 11% had “problems with your emotions, nerves, or mental health that were probably caused or made worse by marijuana”.
      • 7% continued to consume marijuana even though it “was causing you to have problems with your emotions, nerves, or mental health”.
      • 3% had physical health problems as a result, 1% kept consuming marijuana even though they thought it was causing physical problems.
      • 8% said that marijuana caused them to have serious problems at home, work, or school, such as: “Neglecting their children, Missing work or school, Doing a poor job at work or school, Losing a job or dropping out of school”.
      • 7% said they regularly consumed marijuana and then did something where being intoxicated might have put them in physical danger.
      • 6% continued marijuana use even though they thought it caused problems with family or friends.
    • Under full commercialization, the scenario that seems likely to create the largest increase in dependence, cannabis prices are likely to fall dramatically, perhaps to as little as 10% or even 1% of current prices, according to Caulkins 2013, pg. 6 and Caulkins et al. 2012, pg. 171.
    • We find it difficult to estimate how commercial legalization would affect consumption compared with non-commercial legalization. Caulkins et al. 2012, pg. 174 cites RAND research to suggest that price effects would likely be enough to fuel a doubling in consumption, while non-price effects of legalization could increase consumption by another 5-50%. We’re very uncertain, but believe it’s reasonable to model commercialization (relative to a non-commercial legalization that kept prices roughly constant) as doubling consumption.
    • Our general impression is that if total prevalence of use doubles, we should expect the dependent population to roughly double as well.
    • The Global Burden of Disease Study 2010 (GBD) lists the disability weight for cannabis dependence as 0.329. Based on the types of criteria we’ve seen used for dependence (examples used in Caulkins 2014b listed above), this weight seems much too high to us. We use an e¬stimated disability weight for cannabis dependence of 0.05. The following points contributed to this estimate:
      • The National Institute for Drug Abuse estimates that 1.4 million people met criteria for cocaine abuse or dependence (NIDA - Cocaine, Scope of Use), compared with 4.2 million people for marijuana (NIDA - Marijuana, Is Marijuana Addictive). Thus, there are about three times more people dependent on marijuana than cocaine; as marijuana accounts for approximately 50% more hospital admissions than cocaine (NIDA - DrugFacts, Treatment Statistics), cocaine admissions are approximately twice as common as marijuana admissions, relative to the prevalence of dependence.
      • On the metric “days of use by educational attainment”, marijuana looks more similar to cigarettes or cocaine than alcohol (i.e. more likely to be used by people with lower educational attainment) (Caulkins 2013, pg. 5).
      • Budney et al. 2007 tries to make the case that marijuana dependence is a real problem, but acknowledges that it’s less severe than other kinds of dependences. (See also Mackin, Martin and McGavin 2007, a response to Budney et al.)
      • SAMHSA 2014 pg. 1 reports that in 2012 there were 1.8M drug-related hospital admissions in the USA, 17% of those primarily related to marijuana (i.e. ~300K marijuana treatment admissions/year). 52% of marijuana admissions were referred by a criminal justice/DUI source, which is comparable to 47% of methamphetamine-related admissions and 39% of alcohol-related admissions (Table 2.6, pg. 63). We also note that the proportion of marijuana admissions for people under age 20 was substantially higher than for other drugs (pg. 19); it seems likely to us that this implies a higher proportion of marijuana admissions were involuntary (e.g. due to parents or school systems). Overall, we’d guess that something like half of the 300K recorded marijuana-related admissions were “serious”, with the figure artificially inflated by less serious underage and justice-system-related admissions. The 0.05 disability weight we’re using could be justified by assuming that these 150K serious admissions were the primary harm of dependence and that each of these admissions carries costs equivalent to 0.5 DALYs.

    In our calculations to estimate the relative importance of areas within U.S. policy, we use a figure of $50,000/DALY (disability adjusted life years). Combining this with an increase in dependent users of 1.25 million people, and a disability weight of 0.05, we get a cost of doubling dependence of ~$3 billion. We would expect any improvements to the legalization model used (relative to a model allowing full commercialization) to reduce this estimated cost.

    This estimate is an order of magnitude smaller than the result if using the original figures of 12% dependent users and disability weight of 0.329, and overall we consider it a very low-confidence estimate.

    A list of our estimates of the importance of other causes within U.S. policy can be found here.

  • 8.

    “Legalization encompasses a wide range of possible regimes, distinguished along at least four dimensions: the kinds of organizations that are allowed to provide the drug, the regulations under which those organizations operate, the nature of the products that can be distributed, and price. These choices could have profound consequences for the outcomes of legalization in terms of health and social well-being, as well as for job creation and government revenue.” Caulkins et al. 2015, pg. xiii. (This quote is taken from a report to the Vermont legislature on options for marijuana legalization, which was funded by the Open Philanthropy Project.)

  • 9.

    “The Open Society Foundations has been a primary supporter of the Drug Policy Alliance since that organization was founded in 2000. Open Society contributes approximately $4 million annually for DPA’s national and state advocacy and approximately $1 million for redistribution through DPA’s own grants program.

    Separate from its support for DPA, the foundation’s 2013 annual budget for U.S. domestic drug policy grants was $2.8 million. This was down from about $4 million the previous year. The 2014 grantmaking budget will remain essentially the same as the 2013 budget.

    Generally, Open Society does not directly fund marijuana reform projects in the United States. Most of the foundation’s support for marijuana reform involves general support grants to DPA and other major drug policy reform organizations. The foundation acknowledges the importance of reforming American marijuana policy, but it is conscious of its role as one of the very few funders of other critically important, less popular and often highly complex areas of drug policy reform.
    For similar reasons, Open Society’s domestic drug policy program is able to provide only limited and very targeted support for drug policy research. However, it has funded some research in the past and is currently funding Professor Harry Levine’s investigation of racial disparities in marijuana arrests.” Our non-verbatim summary of a conversation with Andy Ko, November 20, 2013

  • 10.

    “Some other important institutional funders in the area of drug policy are the DPA grantmaking program, the Riverstyx Foundation, and Libra Foundation.” Our non-verbatim summary of a conversation with Open Society Foundations, November 19, 2012