Expenditures were measured in US dollars, inclusive of excise taxes but not state or local sales taxes. Trends in product variety were measured using monthly share of expenditures by product type or potency category.
The traceability system reports potency as measured via laboratory testing. THC concentration was calculated as the estimated total weight of THC after decarboxylation as a percent of total item weight (seeSupplementary Appendix for details). Similarly, CBD concentration was measured as total weight of CBD as a percent of item weight.
It is worth noting that the integrity of Washington’s accredited cannabis testing laboratories has been challenged. There are anomalies in the data, incentives to produce results favorable to customers, and limited enforcement mechanisms. However, criticism has largely focused on testing for contaminants, not potency [34 ], and on edible products (which we exclude), for which testing is technically more difficult [35 ]. Further, in April 2016, LCB increased enforcement by issuing new rules for a proficiency testing program to hold labs accountable (effective August 2016) [36 ], and in May issued its first laboratory certification suspension [37 ]. Sensitivity analyses motivated by these concerns are provided in theSupplementary Appendix .
For the cannabis flower price analysis, the outcome measure is the item-level excise-tax-inclusive price per gram, calculated as the excise-tax-inclusive price divided by the quantity purchased in grams and log-transformed. Key predictors are item weight (measured in grams and log transformed), as well as the measures of THC and CBD concentration described above.
Additional covariates in the hedonic price regressions were constructed from the reported date of sale. These included separate indicator variables for whether a sale occurred a) within the first three months of a store’s operation to account for store opening discounts, b) on April 20th, widely recognized as a cannabis holiday, c) on the week prior to the cannabis holiday (April 14th to 19th), and d) after June 30, 2015 to account for the change in Washington’s cannabis excise tax. All regressions also controlled for time effects through indicator variables for month, day of month, and day of week, as well as a 5th order polynomial time trend.
The traceability system reports potency as measured via laboratory testing. THC concentration was calculated as the estimated total weight of THC after decarboxylation as a percent of total item weight (see
It is worth noting that the integrity of Washington’s accredited cannabis testing laboratories has been challenged. There are anomalies in the data, incentives to produce results favorable to customers, and limited enforcement mechanisms. However, criticism has largely focused on testing for contaminants, not potency [34 ], and on edible products (which we exclude), for which testing is technically more difficult [35 ]. Further, in April 2016, LCB increased enforcement by issuing new rules for a proficiency testing program to hold labs accountable (effective August 2016) [36 ], and in May issued its first laboratory certification suspension [37 ]. Sensitivity analyses motivated by these concerns are provided in the
For the cannabis flower price analysis, the outcome measure is the item-level excise-tax-inclusive price per gram, calculated as the excise-tax-inclusive price divided by the quantity purchased in grams and log-transformed. Key predictors are item weight (measured in grams and log transformed), as well as the measures of THC and CBD concentration described above.
Additional covariates in the hedonic price regressions were constructed from the reported date of sale. These included separate indicator variables for whether a sale occurred a) within the first three months of a store’s operation to account for store opening discounts, b) on April 20th, widely recognized as a cannabis holiday, c) on the week prior to the cannabis holiday (April 14th to 19th), and d) after June 30, 2015 to account for the change in Washington’s cannabis excise tax. All regressions also controlled for time effects through indicator variables for month, day of month, and day of week, as well as a 5th order polynomial time trend.