“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.”

https://pubmed.ncbi.nlm.nih.gov/36044436/

“Using a data set and estimation approach novel to health policy, we find evidence that investors predict legal cannabis access will significantly decrease sales of conventional pharmaceutical drugs. Legal cannabis applies competitive pressure to both generic and brand drug markets, across both classes of drugmakers. This makes legal cannabis distinct from typical brand drug patent expiration and generic drug entry where typically only one drug, the drug coming off patent, and its substitutes are affected. Furthermore, cannabis can be purchased without a prescription and home cultivated, unlike any other conventional medication.”

https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0272492