AI Article Synopsis
- Legalization of cannabis in U.S. states has led to an increase in its use as an alternative to traditional pharmaceutical drugs.
- Stock market returns for generic and brand pharmaceutical companies dropped by 1.5-2% within 10 days following legalization events between 1996 and 2019.
- Investors expect an average annual sales reduction of $3 billion for drugmakers after a single cannabis legalization event.
Article Abstract
Legalization of cannabis by U.S. states is likely increasing the use of cannabis as an alternative to conventional pharmaceutical drugs. We examined how cannabis legalization between 1996 and 2019 affected stock market returns for listed generic and brand pharmaceutical companies and found that returns were 1.5-2% lower at 10 days after legalization. Returns decreased in response to both medical and recreational legalization, for both generic and brand drugmakers. Investors anticipate a single legalization event to reduce drugmaker annual sales by $3B on average.
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Source |
|---|---|
| http://www.ncbi.nlm.nih.gov/pmc/articles/PMC9432746 | PMC |
| http://journals.plos.org/plosone/article?id=10.1371/journal.pone.0272492 | PLOS |
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