Cannabiz: Study finds lower crime rates after legalization, more
Study finds lower crime rates after legalization

Opponents of legalizing adult-use marijuana have long held that legalization would lead to higher crime rates in and around the areas where pot shops were commonplace. While various studies have fallen on either end of this argument for years, a new study of crime data in areas within and surrounding Washington and Colorado suggests legalization may not lead to higher crime after all, though the study is limited. Washington and Colorado were chosen for the study as they were the first two states to legalize marijuana, in 2012.

The study, conducted by Guangzhen Wu of the University of Utah, Francis D. Boateng of the University of Mississippi and Thomas Roney, an economic consultant, was published in the Journal of Drug Issues in late May, and has since gained national attention. It analyzed county-level crime data before and after the passage of cannabis laws in the two states, as well as in counties abutting the states’ borders. The idea was to analyze whether there was a spillover effect, with legalization in one state affecting crime rates in a neighboring state.

The researchers found, largely, a reduction in crime rates rather than an increase. This could be attributed to a variety of factors unrelated to legalization, which are not all detailed in the study, but the researchers state that legalization of marijuana deals a blow to the underground black market, therefore directly reducing crime in a given area.

They write: “Moreover, we observed a substantial reduction in certain types of crimes, namely property crime, larceny, and simple assault, in border counties in the Colorado region. This finding challenges the argument made by the opponents of legalization that marijuana legalization would increase crime.”

The study says that past research — which has concluded crime rises in legalization states — is skewed by the reality that marijuana businesses largely operate on a “cash and carry” model, as marijuana is still federally illegal and these businesses cannot use a federal banking system. The presence of large amounts of cash, they claim, may contribute more to crime rates than the presence of marijuana itself.

Another Schwazze deal falls through

Medically Correct, a Denver-based edibles company, announced on July 28 that it “will not proceed with a proposed acquisition by Schwazze,” according to a news release. Schwazze, the Denver-based cannabis company formerly known as Medicine Man Technologies, has seen a year of inconsistent acquisitions.

According to Westword, of the 12 or so acquisitions the conglomerate planned in the past 14 months, only one has gone through: the purchase of Mesa Organics. That deal was closed in April of this year.

Mere weeks ago, Schwazze backed out of two other planned acquisitions: Dabble Extracts, a cannabis concentrates company, and Los Sueños Farms.

As the Indy previously reported: In a market update to its investors on July 2, the company cited the passage of Colorado House Bill 19-1090, which allowed publicly traded corporations to hold a marijuana license, as a reason for rushing ahead on various acquisition deals “with limited due diligence completed.”

This indicates that more of the company’s planned deals may fall through as Schwazze and its prospective acquisitions move forward.