Abstract
Governments worldwide are increasingly concerned about the booming CBD (cannabidiol) products. However, little is known about the impact of their liberalization. We study a unique case of unintended liberalization of a CBD-based product (light cannabis) that occurred in Italy in 2017. Using unique and high-frequency data on prescription drug sales and by exploiting the staggered local availability of the new product in each Italian province, we document a significant substitution effect between light cannabis and anxiolytics, sedatives, opioids, anti-depressants, and antipsychotics. Such medical non-adherence is consistent with a self-medication interpretation. Results are informative for regulators and suggest that policies contrasting this green oil boom risk to disregard the effective need of patients to seek effective reliefs of their symptoms.
Highlights
The cannabis market has gained momentum worldwide
The dependent variable is expressed in logs. This allows us to interpret the DID-coefficient as the average percentage change in the monthly number of dispensed drugs resulting from the local availability of light cannabis
As the market availability of light cannabis became possible due to the entry of at least one retailer in a given province, the number of dispensed drug sales fell by approximately 1.6%, on average
Summary
The cannabis market has gained momentum worldwide. Ranging from recreational and medical marijuana to cannabis-derived products- such as CBD (cannabidiol), a relaxant compound of cannabis- its consumption is booming around the World. Low-strength versions of cannabis such as hemp (or industrial hemp), rich in CBD, have become widely. A major case of interest is Italy, a country with a conservative view on cannabis, but in which “light cannabis shops” unexpectedly blossomed due to a loophole in the legislation and received massive media and political attention.. With the 2018 Farm Bill, hemp was removed from the definition of marijuana of the Controlled Substances Act and similar products have become available in the US as well, where this industry is expected to be worth $20 billion by 2024 (BDS Analytics, 2019) A major case of interest is Italy, a country with a conservative view on cannabis, but in which “light cannabis shops” unexpectedly blossomed due to a loophole in the legislation and received massive media and political attention. With the 2018 Farm Bill, hemp was removed from the definition of marijuana of the Controlled Substances Act and similar products have become available in the US as well, where this industry is expected to be worth $20 billion by 2024 (BDS Analytics, 2019)
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