Is Legal Pot Crippling Mexican Drug Trafficking Organisations? The Effect of Medical Marijuana Laws on US Crime

We examine the effect of medical marijuana laws (MML) on crime treating the introduc-tion of MML as a quasi-experiment and using three different data sources. First, usingdata from the Uniform Crime Reports, we find that violent crimes such as homicides androbberies decrease in states that border Mexico after MML are introduced. Second, usingSupplementary Homicide Reports' data we show that for homicides the decrease is theresult of a drop in drug-law and juvenile-gang related homicides. Lastly, using STRIDEdata, we show that the introduction of MML in Mexican border states decreases theamount of cocaine seized, while it increases the price of cocaine. Our results are consis-tent with the theory that decriminalization of small-scale production and distribution ofmarijuana harms Mexican drug traficking organizations, whose revenues are highly re-liant on marijuana sales. The drop in drug-related crimes suggests that the introductionof MML in Mexican border states lead to a decrease in their activity in those states. Ourresults survive a large variety of robustness checks. Extrapolating from our results, thisindicates that decriminalization of the production and distribution of drugs may lead toa drop in violence in markets where organized crime is pushed out by licit competition