A growing body of research continues to highlight the economic and health-related impacts of marijuana legalization, and a new study published in Health Economics adds compelling evidence to the discussion. According to researchers from Bowling Green State University and Illinois State University, recreational cannabis legalization is associated with a noticeable decline in prescription drug spending among privately insured working-age adults.
Focusing on the small group insurance market—typically employers with fewer than 50 workers—the study found that prescription drug claims dropped by approximately 6% following the implementation of state-level marijuana legalization laws. Interestingly, this effect was not immediate but became statistically significant by the second full year of legalized recreational cannabis use.
“The reduction in claims in the small group market grows stronger in magnitude over time,” the researchers noted, suggesting that as cannabis becomes more integrated into patients' routines, its role as a substitute for traditional pharmaceuticals becomes clearer.
In contrast, the study did not observe the same cost reductions among enrollees in large group insurance plans. Researchers speculated that this discrepancy could stem from workplace policies—many larger companies still enforce drug testing protocols that may discourage employees from using marijuana, even in states where it's legal.
The authors concluded that recreational cannabis laws result in “significant relative declines in prescription drug claims that are concentrated in small group insurance markets,” positioning cannabis as a potential alternative for health maintenance and treatment.
These findings align with earlier studies that linked marijuana legalization to reduced Medicaid spending and lower health insurance premiums. The underlying idea is that cannabis, especially when used to treat chronic conditions like pain, may serve as a safer or more accessible option compared to certain prescription drugs—especially opioids.
NORML Deputy Director Paul Armentano commented on the findings, stating: “Cannabis has established efficacy in the treatment of multiple conditions, including chronic pain, and it possesses a safety profile that is either comparable or superior to many prescription medicines. As legal access continues to expand, one would expect more patients to integrate cannabis products into their wellness strategies in a manner that reduces their overall disease burden as well as their reliance on traditional prescription medications.”
As more states consider or adopt legalization measures, this study reinforces the growing view of cannabis not just as a social or legal issue, but as a public health and economic consideration with far-reaching implications.
