Too High to Innovate : Recreational Marijuana Liberalization and Individual Innovation

This study investigates the effect of individual health conditions on individual innovation output, utilizing the staggered passage of recreational marijuana policies as an exogenous shock. Employing a large and current sample of U.S. inventors from 2010 to 2018, our study identifies a significant decline in patent numbers and citations for individuals residing in states that have adopted recreational marijuana policies compared to others. Our study finds that the decline in innovation output is particularly significant among younger individuals and those with easier access to marijuana. We investigate two possible mechanisms to explain our findings and provide evidence that recreational marijuana policies impact innovation by increasing the frequency of marijuana use and negatively affecting inventors' health. Furthermore, our results suggest that recreational marijuana policies could hinder local firms' innovation due to lower inventors' productivity