Taxing E-Cigarettes Reduced Teen Marijuana Use, Suggesting the Two Are Complements | Research

The takeaway

A one-dollar increase in e-cigarette taxes was associated with a 1.0 to 1.5 percentage point decline in teen marijuana use, indicating e-cigarettes and marijuana are economic complements rather than substitutes.

Substance use policy makers; tobacco/cannabis regulators; public health economists

$1 ENDS tax increase linked to 1.0-1.5 percentage point drop in teen marijuana use

What the researchers found

ENDS taxes reduced both teen e-cigarette use and marijuana use, including co-use. A one-dollar increase in ENDS taxes was associated with 1.0-1.5 percentage point decline in teen marijuana use. No effect was found on use of cocaine, methamphetamine, opioids, or drug treatment admissions. The effects appeared to moderate over time.

Why it matters

The gateway hypothesis has long debated whether vaping leads to other substance use. This economic evidence suggests e-cigarettes and marijuana are used together, so policies reducing one also reduce the other.

The numbers in context

A $1 ENDS tax increase (2023 dollars): 1.0-1.5 percentage point decline in teen marijuana use. Effects moderate over the longer term. No spillover to cocaine, methamphetamine, or opioids.

How the study worked

Difference-in-differences and event-study analysis of YRBSS, BRFSS, and Treatment Episode Data Set data examining effects of state-level ENDS tax policies on substance use.

What this study cannot tell us

Observational policy analysis cannot fully rule out confounders. Tax effects may vary by state context. YRBSS self-reported data. Effects appeared to weaken over time, suggesting adaptation.

How to read the evidence

Rigorous quasi-experimental design using multiple data sources; moderate because of observational limitations and effect moderation over time.

When this study was published

2025 publication analyzing state-level tax policy data

The bigger picture

This finding has significant policy implications: e-cigarette taxation may have unintended positive effects on marijuana use among teens. It also suggests that youth vaping and marijuana use share common drivers.

Questions still open

Are teens using the same devices for nicotine and cannabis? Would marijuana taxes similarly reduce e-cigarette use? Why do the effects moderate over time?

Common questions

What does it mean that e-cigarettes and marijuana are "complements"?

In economics, complements are products that tend to be used together. If taxing e-cigarettes reduces both e-cigarette AND marijuana use, it suggests teens who vape nicotine are also using marijuana, and reducing one reduces the other.

Does this mean vaping causes marijuana use?

Not necessarily. The complement relationship means they are used together, but both could be driven by common factors like peer groups, risk tolerance, or access. The key finding is that reducing vaping access appears to also reduce marijuana use.

Read the original research

The Effect of E-Cigarette Taxes on Substance Use.

Journal of health economics, 102, 103022

View on PubMed ↗Publisher’s paper ↗

Citation

Dave, Dhaval; Liang, Yang; Maclean, Johanna Catherine; Muratori, Caterina; Sabia, Joseph J. (2025). The Effect of E-Cigarette Taxes on Substance Use.. Journal of health economics, 102, 103022. https://doi.org/10.1016/j.jhealeco.2025.103022