Objectives <p>Racial disparities in arrests are a major concern, particularly when it comes to drug enforcement. In 2021, Oregon decriminalized the possession of controlled substances as part of Measure 110 (M-110), an unprecedented policy change in the United States. We estimate how M-110 affected five types of arrests, overall and by race.</p> Methods <p>National Incident-Based Reporting System data covering 3,642 police agencies from 43 states for 2018–2023 are combined with 2020 Census data. We extend a synthetic control methodology developed for micro-level data to test whether policy effects differ across groups and whether policies affect disparities, using permutation inference to quantify uncertainty.</p> Results <p>M-110 reduced drug possession arrest rates in Oregon for the overall population (67.8%) and for the three racial groups we focus on: Black (75.6%), Hispanic (77.5%); and White (66.2%), with the reduction being statistically significantly larger for Hispanic and Black than White individuals. M-110 reduced disorder arrest rates by 30.9% for Black individuals, which is statistically significantly different from zero and the White estimate. Black-White rate differences in drug possession arrests fell by 79.5% and in disorder arrests by 41.7%. In general, M-110 did not affect arrest rates for violent, property, or drug trafficking offenses.</p> Conclusions <p>M-110 reduced drug possession arrests while reducing Black-White rate differences. M-110 led to a decrease in disorder arrests for Black individuals, suggesting police did not substitute one arrest type for another for this population. Our method offers a new approach for examining heterogeneous policy effects and how policies affect disparities.</p>