With California, Maine, Massachusetts, and Nevada permitting recreational use of marijuana in the 2016 elections, the United States moved another step closer to federal marijuana legalization. Full legalization will undoubtedly impact both the illegal and legal drug markets by altering the legal status, price, and availability of marijuana. This research attempts to evaluate the economic effects of marijuana legalization by studying perceived changes to price, availability, and legal risk of marijuana, cocaine, and ecstasy. Research suggests that legalizing marijuana results in cheaper prices, greater availability, and lower legal risk. However, individuals may or may not perceive these changes. Using survey data from a sample of college students, this study explores how marijuana legalization influences perceptions of factors that impact the drug market. The findings indicate that college students perceive marijuana legalization as an important factor that impacts the price, availability and legal risk associated with marijuana, but not associated with cocaine or ecstasy. Relatively positive perceptions of marijuana compared to other drugs following marijuana legalization may increase marijuana substitution for illicit drugs, so policy makers should exercise caution when implementing marijuana taxation as to not detract from this potential effect.