Large-scale businesses experience greater financial success following the adoption of medical cannabis access in their states, according to an analysis published in the scientific journal Financial Management.
Researchers affiliated with the University of Iowa and the University of Illinois assessed the corporate performance of more than 13,000 publicly traded companies prior to and following the adoption of statewide medical marijuana legalization laws.
They determined, “We find that post-legalization, publicly traded firms headquartered in those states receive higher market valuations and experience a substantial increase in employee productivity.”
Researchers suggested that the gains are because companies are better able to recruit and retain more productive and innovative employees following medicalization. “Our results lend support to the creative class theory, which posits that cities supporting socially liberal policies and encouraging an open and diverse atmosphere attract a more creative set of individuals.”
Additionally, they suggested that many employees become more productive post-legalization because they enjoy a greater quality of life.
They study’s authors concluded, “Overall, our findings suggest that state-level medical marijuana laws have a considerable positive impact on firms in the state, likely by having a positive impact on the human capital of [those] firms.”
Commenting on the study, NORML’s Deputy Director Paul Armentano said, “From job creation to tax revenue to improved innovation, legalization is driving economic prosperity.”
Separate studies have linked medical cannabis legalization with reductions in workplace absences, declines in fatal workplace accidents and in workers’ compensation claims, and increases in the total number of hours worked per week.
Other studies have linked marijuana legalization with increased tourism and rising home values.
The full text of the study, “Do firms get high? The impact of medical marijuana legalization on firm performance and corporate innovation,” appears in Financial Management. Additional information is available from the NORML Fact Sheet, ‘Marijuana Legalization and Impact on the Workplace.’
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