Governments worldwide are increasingly concerned about the booming use of CBD (cannabidiol) products. However, we know little about the impact of their liberalization. We study a unique case of unintended liberalization of a CBD-based product (light cannabis) that occurred in Italy in 2017. Using unique and high-frequency data on prescription drug sales and by exploiting the staggered local availability of the new product in each Italian province, we document a significant substitution effect between light cannabis and anxiolytics, sedatives, opioids, anti-depressants and anti-psychotics. Results are informative for regulators and suggest that bans on light cannabis use would disregard the needs of patients to seek effective reliefs of their symptoms.
Keywords: CBD; Difference-In-Difference; Light cannabis; Marijuana; Prescription drugs; Self-Medication.
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