Journal of Financial and Quantitative Analysis Vol. 61 No. 4 2026
Employment Under Marijuana
Abstract
This study examines the impact of recreational marijuana laws (RMLs) on firm-level employment using an imputation-based difference-in-differences (DiD) approach across U.S. states. RMLs significantly reduce employment, particularly among firms with high-skilled labor, strong union presence, permissive corporate cultures, and in states with greater dispensary density. Alternative explanations—including economic crises, COVID-19, fiscal changes, labor regulations, and related policies such as smoking bans and right-to-work (RTW) laws—are systematically ruled out through a series of placebo and robustness tests. RMLs also reduce investment, sales growth, and innovation, suggesting that legalization introduces labor-related frictions with broad implications for firm performance and long-term dynamism.
- DOI
- 10.1017/s0022109025102135
- Volume
- 61
- Issue
- 4
- Pages
- 1915-1948
- Language
- en
- Sources
- openalex crossref