A new study from University of Iowa researchers suggests that businesses do better in states that have legalized medical cannabis. The study analyzed the financial results of more than 13,000 publicly traded companies from 2001 to 2022 found that corporate valuation increased in 21 of 38 states that allowed medical cannabis access.
In a statement, Tong Yao, a professor of finance and one of the study’s authors, said medical cannabis legalization sends a signal about the state’s culture that attracts creative and productive people to the state.
“In addition to providing a host of medical benefits, legalizing marijuana can also give the state a ‘cool image.’ Highly skilled and creative human capital is especially appreciative of open, new, and divergent policies, such as legalized medical marijuana, and that can potentially help states retain and attract more productive and creative workers.” — Yao in a statement
The study also found gross profit per employee and gross sales per employee each increased by more than $8,000 in states that had legalized medical cannabis versus state that have not and patents increased by 10.4% across all 38 states that had legalized medical cannabis and the economic value of those patents increased by 22%, as states were able to retain their inventors and also drew inventors from states that had not passed the reforms.
The study, “Do firms get high? The impact of medical marijuana legalization on firm performance and corporate innovation,” was published in the journal Financial Management.
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