Drug Policy Research

Caulkins, Jonathan P.; Pacula, Rosalie Liccardo

doi:10.1002/9781444318852.ch22

Cited by 2 publications

(2 citation statements)

References 32 publications

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“…In general, indoor cannabis farming employs labor, electricity (for lighting), and other non-labor inputs such as soil, water, and nutrients (Caulkins 2010). We assume that cannabis growers use the Cobb-Douglas production technology for its simplicity.…”

Section: Profit Estimationmentioning

confidence: 99%

“…Third, we apply a 10% decrease in cannabis price to simulate the case when the market price is stabilized after recreational cannabis legalization 10 (Shover and Humphreys 2019) for growers. Fourth, we apply the reduced input-price case, to simulate a decreased cost due to technological development through legalization (Caulkins 2010;Kagia et al 2020). This framework is expected to have two outcomes.…”

Section: Profit Estimationmentioning

confidence: 99%

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The supply-side effects of cannabis legalization

Han

Ng’ombe

2022

J Cannabis Res

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Objective The purpose of this study is to examine how cannabis legalization and corresponding taxation would affect the supply-side of the cannabis market. Specifically, the study considers various scenarios in which Oklahoma legalizes recreational cannabis for adult use and simulates changes in state-level market sales for other legal states and the average grower profits in Oklahoma. We assume that legalizing recreational cannabis in medical-only states would significantly increase the demand quantity in the legalized states and the local government would levy a significant level of tax on recreational cannabis. These assumptions are based on the post-legalization phenomena in other legalized US states. Method We simulate outcomes in the cannabis industry under the assumption of representative consumers with constant elasticity of substitution demand behavior and profit-maximizing firms with a Cobb-Douglas profit function. All agents are assumed to take exogenous prices as given. We calibrate the model using state-level sales data from 2020 and explore potential policies in Oklahoma and at the federal level. Results We find that, under the scenarios we consider, legalization of recreational cannabis in Oklahoma would lead to a decrease in the quantity of cannabis sold in Oklahoma’s medical cannabis market as well as decreases in the quantity of cannabis sold in other states on average. Furthermore, we find that as the excise tax rate on recreational cannabis in Oklahoma is increased, the demand quantity in recreational cannabis market would decrease while the other markets’ demand quantity would increase on average. As the elasticity of substitution between state-level products increases, the overall demand quantity would increase and the market quantity across states become more sensitive to Oklahoma’s tax policies. This pattern could become starker as the elasticity of substitution between recreational and medical cannabis increases. In terms of profit, heavy taxation and price decrease due to legalization would significantly decrease cannabis producers’ production and profit levels unless the cost reduction strategies complement legalization. Conclusion Based on our results, the legalization of recreational cannabis has the potential to generate tax revenue to fund critical government projects and services. However, such legalization would have to be done carefully because heavy excise taxes would decrease the legal cannabis market demand and growers’ profit, which would incentivize producers and consumers to move to the illicit cannabis market. Policymakers would have to compromise between the levels of interstate transportation and taxation to ensure that cannabis suppliers also realize some profit within the cannabis supply chain.

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Section: Profit Estimationmentioning

confidence: 99%

Section: Profit Estimationmentioning

confidence: 99%

The supply-side effects of cannabis legalization

Han

Ng’ombe

2022

J Cannabis Res

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A One-Step Grafting Methodology Can Adjust Stem Morphology and Increase THCA Yield in Medicinal Cannabis

et al. 2022

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The standard two-step methods for grafting horticultural crops involve cultivating the rootstock for a period of time and then connecting the scion. Medicinal cannabis differs from most annual horticultural crops because it is usually clonally propagated from cuttings. We developed a grafting methodology specifically for medicinal Cannabis, involving a single step, in which a freshly cut scion is grafted to a freshly cut donor stem that will become the rootstock. This study also aimed to uncover a potential role for roots in influencing cannabinoid content. Two varieties with desirable attributes but cultivation limitations were selected to act as scions. The first, “CBD1” was a high CBDA accumulating variety with low biomass yield, and the second, “THC2”, was a high yielding, high THCA accumulating line with inconsistent root development during cloning. Two candidate rootstocks, “THC9r” and “THC8r”, were identified; both were high THCA, low CBDA varieties. Biomass yields in the THC2 scions grafted to THC9 rootstocks (THC9r_2s) were 20% higher than in the non-grafted THC2 plants. In CBD1 grafted plants, the concentrations of CBDA and some minor cannabinoids were significantly different to non-grafted CBD1, but biomass yields were lower. There was a trend towards a higher concentration of THCA in THC9r_2s plants, and when combined with the increased biomass, yield of THCA was increased from 8 g Plant-1 to 13 g Plant-1. Our results present a new grafting method for medicinal cannabis that improved yield in THC2 and required no additional cultivation time.

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Drug Policy Research

Cited by 2 publications

References 32 publications

The supply-side effects of cannabis legalization

The supply-side effects of cannabis legalization

A One-Step Grafting Methodology Can Adjust Stem Morphology and Increase THCA Yield in Medicinal Cannabis

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