Weeding out Workplace Accidents? The Effect of Medical Marijuana Dispensaries on Workplace Safety

Drug use is often presumed to erode worker productivity and compromise workplace safety. However, little is known about how the increased availability of cannabis arising from marijuana liberalizing policies and medical marijuana dispensaries impacts safety in the workplace. Although a growing body of research supports the medical benefits of marijuana which would improve worker productivity, the psychoactive properties of the drug are known to impair the cognitive and psycho-motor skills hindering normal, everyday work activities (Ramaekers et al., 2004). Thus, employers invest resources to promote a drug-free workplace to maximize worker safety and productivity.

Recent literature uses state-level variation in medical marijuana laws to estimate the impact of such policies on earnings (Sabia and Nguyen, 2016), the labor supply of retirement-age individuals (Nicholas and Maclean, 2016), absenteeism (Ullman, 2016), and social security disability claims (Maclean, Ghimire, and Nicholas, 2017). This paper is the first to exploit within- and across-state variation in marijuana dispensary openings to examine the impact of increased marijuana access on workplace safety at nearby firms.

Using a difference-in-differences approach, this paper pairs a self-constructed national marijuana dispensary directory with establishment-level workplace injury data to find that firms experience five percent fewer workplace injuries following the opening of a dispensary (0.34 fewer workplace injuries per 100 full-time equivalent workers). The effects are largest in transportation industry and suggest that marijuana’s relationship to other goods in the accident production function dominate the positive effect from increased marijuana consumption. As a potential channel, we examine the impact of dispensaries on employer-sponsored drug tests and find that dispensaries are associated with an eight percentage point decrease in opiate-positive drug tests. Furthermore, we use responses from the geocoded Medical Expenditures Panel Survey (MEPS) over the same sample to find that a dispensary presence results in a five percentage point decrease in the probability an individual misses work due to their own injury or illness. Back of the envelope calculations estimate the savings to establishments from fewer workplace injuries following the opening of a dispensary in their county exceeds $240 million in 2011.

Due to the intoxicating properties of marijuana, it is often presumed that increased accessibility to the drug will result in an increased risk of accidents. However, this paper provides evidence of fewer workplace injuries following a dispensary opening and suggests that marijuana accessibility reduces workplace accident-related costs to individuals, firms, and to the economy as a whole.