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The United States is in the throes of an unprecedented policy experiment with cannabis liberalization. In November 2012, the state of Colorado became one of the first states to legalize recreational cannabis use for those over the age of 21, but criminal penalties remain in place for youth. As of September 2022, 19 more states, 2 territories, and the District of Columbia have legalized recreational cannabis use (NCSL, 2022). Recreational cannabis laws potentially increase the availability of cannabis, resulting in higher risks for youth obtaining it, using it, and being caught with it. Cannabis possession has historically been the largest arrest offense category for both adults and youth, with disproportionately high arrest rates for youth and minorities (Nguyen & Reuter, 2012). Some of the most frequently cited arguments for cannabis legalization are reducing criminal justice involvement, racial inequalities, and costs related to enforcing prohibition (Doonan, et al., 2020; McGinty, 2016). Colorado’s Amendment 64 states that legalization is “[i]n the interest of efficient use of law enforcement resources.” However, Recreational cannabis laws (RCLs) potentially increase the availability of cannabis, resulting in a higher risk of youth obtaining, using, and being caught with it. It is unclear what the impact of recreational legalization will be on youth.

Having a juvenile arrest record has a number of life-long implications, including loss of access to federal financial aid for higher education, driving privileges, and qualification for some types of jobs (Cooley, 2016). These and other consequences result in cumulative disadvantages across the course of one’s life (Nguyen & Reuter, 2012). Therefore, the effects of cannabis policy changes on youth contact with the criminal justice system are a leading concern for communities. Researchers and policymakers are closely watching public safety outcomes in states and communities that are experimenting with cannabis liberalization.

Although Colorado has legalized personal use and commercialization of the cannabis industry, the law is not applied uniformly across the state. Colorado’s Amendment 64 allows municipalities to control commercialization policies within their communities. For example, some counties ban all cannabis businesses, whereas other counties allow high volumes of cultivators, manufacturers, and retail outlets. This principle of “home rule” produces a complex cannabis policy landscape that is perfect for a natural experiment to investigate the role of local policymaking on the probability of juvenile arrest for cannabis. The variation in Colorado municipalities’ commercialization policies can produce useful insights into how to mitigate risks and identify unintended consequences while reaping the potential fiscal and economic benefits of cannabis legalization.

Most states that legalize cannabis allow municipalities to retain control over the size and types of cannabis businesses within their respective jurisdictions through licensing, taxation, and land use. Additionally, local police agencies are at the forefront of enforcement. Analysis of Colorado National Incident Based Reporting System (NIBRS) data for this study revealed that more than 74 percent of arrests were made at the local level. Community and local law enforcement priorities can play an important role in determining who is arrested or cited for what and when. For example, Devlin and Gottfredson (2016) found that the presence of a school resource officer increased the level of crime reporting.

Legalization and commercialization are not equivalent cannabis policies. Legalizing consumption is separate from legalizing commercial cultivation, manufacturing, and sales. Commercializing the cannabis industry introduces cannabis to the public space through signage, advertising, and branding. It enables the presence of economically driven suppliers, who may seek ways to increase demand, whereas legalization of consumption alone does not (Subritsky, 2016). Of course, economically driven suppliers already exist in the illicit market, but they are restricted from advertising and branding, and they do not have store fronts. The prohibition of cannabis, especially its commercialization, also restricts riskier, high-potency product development. It remains unclear whether a regulated, commercial market will do a better job than the illicit market of reducing youth access or involvement in the criminal justice system.

Current cannabis research has followed in the footsteps of alcohol research in its focus on retail outlets. While there are many parallels between alcohol and cannabis, there are also some important distinctions in the production and manufacturing of cannabis that make them less than perfect analogs. The diversion of cannabis is much easier than that of alcohol. Once a cannabis plant has budded, there is minimal processing before its intoxicating effects can be accessed. Wheat, rye, or barley requires much more processing before their intoxicating effects are unlocked. Additionally, as a dried good, cannabis is lighter and easier to transport than bottles or cans of beer, wine, or hard alcohol. As of May 2022, no studies have examined the effectiveness of the seed-to-sale system in preventing diversion or its role as barrier-to-entry into the legal market (thus contributing to Colorado’s robust illicit cannabis market). Aside from diversion, the economic reliance of a community on the cannabis industry could lead to a change in social norms, influencing youth access and enforcement. The potential effects of other types of cannabis businesses on public safety are unexplored in the existing literature.

To investigate the impact of the commercialization of the recreational use of cannabis on the risk of juvenile arrests, this study exploits the natural variation in county ordinances. Through a two-stage difference-in-difference analysis, this research brings together county-level juvenile demographic census data, NIBRS data on county-level juvenile arrests for cannabis-related offenses by race and gender, and information on county-level ordinances and other county characteristics between 2012 and 2018.

So, has the commercialization of the Cannabis industry impact juvenile arrests in Colorado?

The evidence suggests that legalization and commercialization reduce youth cannabis arrests on the whole, but on closer examination it is clear that commercialized counties saw a larger reduction in juvenile arrests after Amendment 64 was adopted than did non-commercialized counties. It appears the drop in arrest rates is due to changes in enforcement. The results also suggest that the presence of cultivators in a community plays a role in juvenile contact with the criminal justice system. If the purpose of legalization or liberalization of cannabis laws is to reduce the harms inflicted by the enforcement of cannabis prohibition, then Colorado is at least partially succeeding. However, a substantial number of youths are still being arrested each year. States and communities should consider decriminalizing juvenile cannabis possession and use. The American Academy of Pediatrics endorses the decriminalization of cannabis, not because its experts think cannabis is harmless, but rather because the implications of juvenile contact with the criminal justice system are more harmful. Other policy recommendations for reducing youth cannabis use and arrests are robust compliance checks, limiting or banning advertising, and banning home cultivation. Zoning is another policy tool that local leaders can employ as a protective measure for youth. By keeping cannabis businesses out of residential and school zones, communities can limit youth exposure. States and communities should carve out funding for planning and executing multiagency public messaging and education, especially campaigns that target peer networks, as sharing among friends is a leading source of cannabis for youth. Data collection and monitoring are critical to identifying evidenced-based policies that achieve a community’s policy goals. Another key recommendation for limiting youth access to cannabis is reducing the illicit market, though this is no easy task.