Higher Cannabis Prices Reduce Teen Use — But Only Modestly | Research

The takeaway

In states with legal recreational cannabis, higher prices were associated with lower adolescent cannabis use, with a price elasticity of -0.21 to -0.33, but taxes alone showed no significant effect on use rates.

Cannabis policy makers, state legislators setting tax rates, public health economists, and researchers studying adolescent substance use prevention.

What the researchers found

An increase in legal cannabis prices was associated with lower likelihood of current cannabis use among adolescents, with estimated price elasticity ranging from -0.33 to -0.21 (p<0.05 for most specifications), but neither cannabis prices nor taxes were significantly associated with frequent cannabis use.

Why it matters

As states set cannabis prices and tax rates, this study provides the first estimates of how adolescent use responds to pricing — suggesting taxes alone may not deter teens, but higher retail prices can.

The numbers in context

N=40,277 adolescents; 10 states; 2015-2022; price elasticity -0.33 to -0.21; significant for current use but not frequent use; tax effects nonsignificant for both outcomes

How the study worked

Analysis of Monitoring the Future Survey data (2015-2022) from 40,277 adolescents in 10 states with commercialized recreational cannabis, using logistic regression and generalized method of moments estimation with cannabis tax as an instrumental variable.

What this study cannot tell us

Inconsistent significance across model specifications; only 10 states included; legal prices may not reflect black market prices teens actually face; self-report measures; cross-sectional repeated surveys; price endogeneity despite instrumental variable approach.

How to read the evidence

Large sample with instrumental variable approach to address price endogeneity, but inconsistent results across specifications and limited state coverage weaken conclusions.

When this study was published

Published 2026; covers 2015-2022 data from the legalization era.

The bigger picture

Price-based regulation is a proven tool for reducing tobacco and alcohol use, and this study suggests it could modestly reduce adolescent cannabis use — but the inelastic demand means price alone won't solve the problem.

Questions still open

Do teens primarily buy from legal or illegal markets? Would minimum pricing be more effective than taxes? How does price elasticity compare across age groups and income levels?

Common questions

Do higher cannabis prices reduce teen use?

Modestly — this study found that higher legal cannabis prices were associated with lower adolescent use (price elasticity of -0.21 to -0.33), meaning a 10% price increase might reduce teen use by 2-3%. But cannabis taxes alone showed no significant effect.

Are cannabis taxes effective at reducing teen use?

Not directly, according to this study. While higher retail prices were associated with lower use, cannabis taxes themselves did not significantly reduce adolescent cannabis use — possibly because teens access cannabis through channels where taxes don't apply.

Read the original research

Estimating Price Elasticity of Cannabis Use Among U.S. Adolescents: Evidence From States With Recreational Cannabis Commercialization.

The Journal of adolescent health : official publication of the Society for Adolescent Medicine, 78(1), 61-68

View on PubMed ↗Publisher’s paper ↗

Citation

Han, Bing; Park, Hojin; He, Yanyun; Shang, Ce; Shi, Yuyan. (2026). Estimating Price Elasticity of Cannabis Use Among U.S. Adolescents: Evidence From States With Recreational Cannabis Commercialization.. The Journal of adolescent health : official publication of the Society for Adolescent Medicine, 78(1), 61-68. https://doi.org/10.1016/j.jadohealth.2025.08.021