THE CROSS-BORDER SPILLOVER EFFECTS OF RECREATIONAL MARIJUANA LEGALIZATION

We examine the spillover effects of recreational marijuana legalization (RML) in Colorado and Washington on neighboring states. We find that RML causes a sharp increase in marijuana possession arrests in border counties of neighboring states relative to nonborder counties in these states. RML has no impact on juvenile marijuana possession arrests but is rather fully concentrated among adults. We find mixed results regarding the source(s) of this change. Using separate data on self-reported marijuana use, we show that RML is accompanied by an increase in use in neighboring states relative to non-neighboring states. However, the increase in arrests following RML is highly concentrated in a few states, which we argue is more consistent with a change in police enforcement near some state borders driving the arrest results. (JEL I12, I18, K14)