Why do Consumers Continue to use Unregulated Sources …northamericancannabissummit.org/wp-content/uploads/2019/... · 2019. 3. 25. · Influences Consumer Behavior “I’m looking

Why do Consumers Continue to Use Unregulated Sources

Following Legalization?Jane Allen, M.A., Research Public Health Analyst, RTI International

Matthew Farrelly, Ph.D., Chief Scientist, RTI InternationalBrian Bradfield, B.A. Economist, RTI International

Presentation Overview

Background

RTI survey of consumers in Colorado and Washington (2014)

RTI’s National Cannabis Climate Survey (2016-2017)

Discussion

2019 North American Cannabis Summit 2

Background


Legalization & Transition to the Regulated Market

A goal of legalizing marijuana is to transition consumers from the unregulated to the regulated market.

Benefits of doing so include a greater proportion of consumers using products that are: ‒ Tested‒ Labeled, including consumption guidance ‒ Sold by trained staff ‒ Taxed


But will Consumers Make the Transition?

Having a legal purchase outlet is probably enough to prompt some consumers to make the switch.

We know laws prohibiting marijuana have kept some “would be consumers” out of the market.


The Legal Status of Marijuana Influences Consumer Behavior

“I’m looking forward to legalization. I’ve led a public life that required me to be on the straight and narrow.”

‒ Mike Tautznik, 64, former mayor of Easthampton, MA. Quoted in the Boston Globe, 3/23/18

6

10%

26% 29%35%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Definitely Probably Probably Not Definitely Not

Would You Use Marijuana Again if it Were Legal in Your State?

RTI’s 2016-2017 National Cannabis Climate Survey

But Legalization is Not the Only Factor

Legalization is not the only factor driving consumer purchase behavior.

After all, millions of U.S. adults (and youth) have not let the legal status of marijuana prevent them from buying it. So…What else do we need to think about, in terms of what

influences transition to regulated markets?


RTI Survey of Consumers in Colorado & Washington (2014)


RTI Research

2014 survey of past-year marijuana consumers in Colorado & Washington We asked current (past 30-day) consumers who reported

purchasing marijuana:

‒ Thinking now about the last time you bought marijuana, what factors influenced your decision about where to buy it?

‒Which of these factors was the most important in deciding where to buy marijuana?


Presenter

Presentation Notes

Past year CO=634; WA=718 Past 30 day CO 399; WA=466

10

Most Important Factor in Purchase Decision

Past 30-day Consumers; Colorado, 2014

n=371

24% 25% 25%

8% 5% 4% 9%0%

10%20%30%40%50%60%70%80%90%

100%

Price ConvenientLocation

Quality Strength Safety Type Other

Which of these factors was the most important in deciding where to buy marijuana?

Presenter

Presentation Notes

Data collected 9 months after the first legal sales.

Price

Setting tax rates to promote transition to the regulated market (while not promoting use)‒ Pat Oglesby “How Cannabis Taxation Is Likely To Evolve.”

Tuesday at 1:30

Studies affirm that price is an important factor in marijuana purchase & use decisions.‒ Pacula and Lundberg, 2014


The Economic Relationship Between Marijuana and Other Substances

One study shows that when cigarette prices increase, the intensity & probability of marijuana use decreases.‒ Farrelly et al., 2001

Others show that when the price of beer increases, the probability of marijuana use decreases. ‒ Pacula,1998‒ Williams et al., 2004


Presenter

Presentation Notes

What other factors drive transition to the regulated market? Other studies look at these relationships more fully, including the issue of access to marijuana. The studies I focus on here relate only to price.

Availability/Access

A 2016 literature review reveals a complex relationship between marijuana and alcohol, in which availability is a factor.‒ Complements in some contexts, substitutes in others‒ Subbaraman, 2016

2017 MTF data indicate marijuana is “readily available” to young adults (87-90%) and to a lesser degree adults age 55+

(77%).‒ Data likely relate to access, not price‒ Schulenberg et al., 2018


Presenter

Presentation Notes

Price Isn’t Everything MTF: “We suspect, however, that for most respondents, what we are measuring is perceived access, with little or no consideration of monetary cost.” MTF analysts conclude that “marijuana has been readily available to the great majority of American 12th graders (from 80% to 90%) since 1975.” Miech et al., 2018 Could get marijuana “fairly” or “very” easily

Convenience

For many consumers, legalization has not given rise to more convenient purchase locations.

Two years after the first legal sales in Washington, about one third of the population lived in a community that banned marijuana sales.‒ Dilley et al., 2017

Lack of convenient access might influence some consumers to stay with their usual unregulated source, even as regulated sources become available.


Presenter

Presentation Notes

Policy makers and public health professionals seek to apply lessons learned from tobacco and alcohol to the regulation of marijuana.13, 14 However, the public health imperative to eliminate the underground or illicit marijuana market means that key lessons from other substances are not always applicable. For example, taxes are strongly and negatively associated with cigarette smoking and alcohol use rates; higher taxes consistently produce lower rates of use. It is also true that controlling the density of outlets at which cigarettes and alcohol can be obtained limits consumption. In contrast, there is a thriving underground or illicit marijuana marketplace that will remain in place if high taxes result in prices that are not competitive, or if the sparsity of legal marijuana outlets make it inconvenient for consumers to patronize that system.

RTI’s National Cannabis Climate Survey (2016-2017)


RTI’s National Cannabis Climate Survey

A national survey of adults, 18+

Consumers, former consumers, never consumers

Document marijuana-related beliefs, knowledge, attitudes, and behaviors in the United States during a period of changing marijuana laws.

Data collection: August 2016 – June 2017


Data Collection & Sample Sizes


Start Date Recruitment Data collection Sample Size

ABS Social Media

Online Mail

Wave 1 Aug 2016 4,453

Wave 2 Dec 2016 1,371

Wave 3 May 2017 822

Total 1,867 4,779 5,824 822 6,646

Sampling

The address-based sample was stratified by state legal status: ‒ no legal marijuana‒ restrictive access medical marijuana‒ liberal access medical marijuana‒ legal recreational marijuana

We oversampled in states with legal recreational marijuana.


Presenter

Presentation Notes

Legal states are CO, WA, OR and AK but we don’t have any sample from AK

Questions of Interest

We examined:

1. The proportion of adult consumers that report “usually” purchasing marijuana from an unregulated source

2. What those sources were

3. How unregulated purchases differ by state legal status


Presenter

Presentation Notes

It is unclear what proportion of consumers will transition to the regulated market when given the opportunity. Rogeberg, 2018

Measure

Thinking about times in the past year when you bought marijuana, how did you usually get it? ‒ I went to a medical marijuana dispensary in my state ‒ I went to a medical marijuana dispensary in another state ‒ I went to a recreational marijuana retail store in my state‒ I went to a recreational marijuana retail store in another state‒ I bought it online‒ I bought it from a friend ‒ I bought it from an informal seller‒ I bought it some other place


Measure

Thinking about times in the past year when you bought marijuana, how did you usually get it? ‒ I went to a medical marijuana dispensary in my state ‒ I went to a medical marijuana dispensary in another state ‒ I went to a recreational marijuana retail store in my state‒ I went to a recreational marijuana retail store in another state‒ I bought it online‒ I bought it from a friend‒ I bought it from an informal seller‒ I bought it some other place


“Unregulated Sources”

Presenter

Presentation Notes

Online sales can be legal, but often were not at time of study

Methods

Unweighted data

Logistic regression, controlling for:‒ age‒ gender‒ race/ethnicity‒ Education‒ political philosophy

Model unadjusted for recruitment mode



43%36%

22%

69%

30%

1%

75%

5%14%

7%

20%

50%

31%

13%

23%

54%

11%

60%

15%6%

19%

0%

20%

40%

60%

80%

100%18

-34

35-5

4

55+

Fem

ale

Mal

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Oth

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Whi

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Blac

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His

pani

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Col

lege

+

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Libe

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Rec

reat

iona

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Med

ical

libe

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Med

ical

rest

rictiv

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Not

lega

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Age Gender Race/Ethnicity Education Political Philosophy Legal Status

Sample DemographicsPast-year consumers who report a usual purchase channel (n=1,392)

Unregulated Purchases by State Legal Status

78.8% 82.9%

57.9%

20.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

No Legal Marijuana Medical (restrictive) Medical (liberal) Recreational

Usually Purchased Marijuana from an Unregulated Source, by State Legal Status

n=1,392. Estimates adjusted for demographics

Presenter

Presentation Notes

A+B are both greater than B or C p<0.001

Unregulated Purchases by Source & Legal Status

59% 65%

44%

15%

18%16%

12%

4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

No legal marijuana Medical (restrictive) Medical (liberal) Recreational

Usually Purchased Marijuana from an Unregulated Source, by State Legal Status

Friend Informal Seller Online

78.8%82.9%

57.9%

20.0%

n=1,392. Estimates adjusted for demographics

Presenter

Presentation Notes

The most common unregulated source of marijuana was a friend. About 20% of sales are from an informal seller, regardless of the legal context. Few (2% or less) are buying online.

Logistic Regression Model

The odds of purchasing from an unregulated source are greater if you live in a state with less access to marijuana, compared to a state with legal recreational marijuana.

Compared to Legal States….‒No legal marijuana: OR=18.84 ‒Restrictive medical: OR=25.03

both p<0.0001


Out-of-State Purchases

A proportion of respondents (2.5% to 8.1%) report usually purchasing from a legal out-of-state source.‒ Not legal to transport across states lines


Presenter

Presentation Notes

2.5 in recreational states 8.1 in no legal states

Limitations

The legal environment may have influenced reporting.

Misreporting; some respondents reported regulated, in-state purchases that are not legally possible in their state.

No data on price, convenient purchase location, or perceived product quality.

Cross-sectional data


Conclusions

Legalization & liberalization of marijuana is associated with a greater proportion of consumers in the regulated market.

Policymakers at the state and local level would do well to consider the role of convenience in promoting or undermining transition to the regulated market. ‒ Placement and density of outlets

Researchers may want to focus on social as well as economic factors to understand marijuana purchase behavior.


Jane Appleyard Allen, M.A.Research Public Health AnalystCenter for Health Policy Science and Tobacco Research RTI International 307 Waverly Oaks Road781.370.4041www.rti.orgwww.rti.org/emerging-issue/marijuana-research

Documents

Why do Consumers Continue to use Unregulated Sources …northamericancannabissummit.org/wp-content/uploads/2019/... · 2019. 3. 25. · Influences Consumer Behavior “I’m looking