Being High, Feeling Low? Effects of Recreational Marijuana Legalization Policies on Mental Health

Sammanfattning: In the last years, several states in the United States have enacted medical and recre- ational marijuana legalization laws (MMLs and RMLs). These policies aim to regulate the handling of marijuana consumption at the state level. This led to an ongoing debate on the effects of such laws on public health. However, the literature on this topic is very limited regarding the effects of recreational marijuana legalization on mental health. In this paper, we present new insights on this matter by additionally disentangling the policy heterogeneity and considering the opening of recreational marijuana dispensaries (RMDs) in the United States. Exploiting the staggered imple- mentation of the legalization laws across states and over time, we follow a two-way fixed effects regression model. Using monthly individual-level data from the Behav- ioral Risk Factor Surveillance System (BRFSS) for 1993 - 2020 we find that recreational marijuana legalization only significantly affects mental health through operational marijuana dispensaries. The introduction of RMDs increases the probability of having at least one bad mental health day in the last 30 days by 2.3 p.p., which corresponds to a 7.23 % increase relative to the sample mean. Following an event study approach we show that this effect does not begin immediately but only two years after the dispen- saries became operational. In contrast, the sole enactment of recreational marijuana legalization laws does not significantly affect mental health.