A discrete choice experiment with 963 cannabis consumers found that quality and accessibility drive legal cannabis purchases while price drives illegal purchases, with policy simulations predicting ways to shrink the illicit market.
Cannabis regulators and policymakers; researchers studying legal vs illegal market dynamics.
Quality and accessibility are top drivers for legal cannabis; price is the top driver for illegal
What the researchers found
For legal cannabis, quality and accessibility (distance to seller) were the most important attributes. For illegal cannabis, price was the most important attribute. The likelihood of choosing legal cannabis increased with higher quality, lab testing, shorter distance, higher THC, and lower price. Policy simulations predicted that improving quality, allowing delivery, increasing dispensary density, and lowering prices could reduce illegal market share.
Why it matters
Despite legalization, illegal cannabis markets remain large or even dominant in many US states. Understanding exactly what drives consumers toward legal or illegal sources provides actionable evidence for policies that could shift market share away from unregulated, untested products.
The numbers in context
963 adult cannabis consumers. Five product attributes varied: quality, safety (lab testing), accessibility (distance), potency (THC level), and price. Policy simulations identified five strategies to reduce illegal market share: improving quality, ensuring safety testing, allowing delivery services, increasing dispensary density, and lowering prices/taxes.
How the study worked
Discrete choice experiment with 963 adults who used cannabis in the past year and lived in states with recreational legalization. Participants chose between purchasing from a legal dispensary or illegal dealer across scenarios varying in quality, safety (lab testing), accessibility, potency, and price. Mixed logit models analyzed preferences.
What this study cannot tell us
Hypothetical choice scenarios may not perfectly predict real purchasing behavior. The sample was recruited online and may not represent all cannabis consumers, particularly those most reliant on illegal markets. State-level variation in legal market regulations was not modeled.
How to read the evidence
Moderate: rigorous experimental design with appropriate econometric modeling, but hypothetical choices may not fully reflect real-world purchasing behavior.
When this study was published
2024 study.
The bigger picture
The persistence of illegal cannabis markets after legalization is one of the biggest challenges facing cannabis policy. This study reframes the problem as a consumer choice driven by specific, addressable product attributes rather than an intractable black market, giving regulators concrete levers to pull.
Questions still open
- Which combination of policy changes would most cost-effectively shift consumers from illegal to legal markets? Do price-sensitive illegal market consumers differ demographically from quality-sensitive legal market consumers?
Common questions
Why do people still buy illegal cannabis?
What policies could shrink the illegal market?
Read the original research
Cannabis consumers' preferences for legal and illegal cannabis: evidence from a discrete choice experiment.
BMC public health, 24(1), 2397
Citation
Xing, Jin; Shi, Yuyan. (2024). Cannabis consumers' preferences for legal and illegal cannabis: evidence from a discrete choice experiment.. BMC public health, 24(1), 2397. https://doi.org/10.1186/s12889-024-19640-1