Between 1973 and 1978, 12 states with collectively over one-third of the total U.S. population enacted laws that decriminalized the possession of marijuana. This article uses standard metropolitan statistical area (SMSA) level data on hospital emergency room drug episodes collected by the Drug Abuse Warning Network to measure the effect of changes in drug penalties on substance abuse crises. The regression models demonstrate that marijuana decriminalization was accompanied by a significant reduction in episodes involving drugs other than marijuana and an increase in marijuana episodes. Although possible biases in the data preclude firm conclusions, the results suggest that some substitution occurs towards the less severely penalized drug when punishments are differentiated.