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U.S. cannabis laws projected to cost generic and brand pharmaceutical firms billions

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  • Ziemowit Bednarek
  • Jacqueline M Doremus
  • Sarah S Stith

Abstract

Legalization of cannabis by U.S. states is likely increasing the use of cannabis as an alternative to conventional pharmaceutical drugs. We examined how cannabis legalization between 1996 and 2019 affected stock market returns for listed generic and brand pharmaceutical companies and found that returns were 1.5-2% lower at 10 days after legalization. Returns decreased in response to both medical and recreational legalization, for both generic and brand drugmakers. Investors anticipate a single legalization event to reduce drugmaker annual sales by $3B on average.

Suggested Citation

  • Ziemowit Bednarek & Jacqueline M Doremus & Sarah S Stith, 2022. "U.S. cannabis laws projected to cost generic and brand pharmaceutical firms billions," PLOS ONE, Public Library of Science, vol. 17(8), pages 1-19, August.
    • Handle: RePEc:plo:pone00:0272492
    DOI: 10.1371/journal.pone.0272492
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    References listed on IDEAS

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