California May Use Pot for Profit

ADVERTISEMENT

With the California economy on life support, voters in the state will get to decide whether marijuana is the right remedy.

Last week the state legislature approved putting the issue to a referendum in November, allowing voters to weigh in on legalizing marijuana for non-medicinal purposes.

The proposal, which would regulate the production and sale of marijuana to those 21 and older, is the first of its kind in the U.S., though a number of other states have considered taking up the issue. Facing a $22 billion budget shortfall, California can expect tax revenue from legalization of up to $1.4 billion per year, according to the state’s own estimates.

Assemblyman Tom Ammiano, a Democrat from San Francisco who proposed the legalization bill, believes that there is no better time to move forward. “With the state in the midst of an historic economic crisis, the move towards regulating and taxing marijuana is simply common sense,” he said.

In addition to the tax revenue that this change in policy can provide, Ammiano points to the savings in law enforcement expenditures that would result. There were more than 74,000 marijuana-related arrests in the state in 2007, amounting to more than $1 billion in enforcement costs, a savings that would also help California’s bottom line.

Opponents of the plan point out that those who smoke marijuana are more likely to move on to harder and more dangerous drugs, forecasting a rise in crime and addiction if the measure passes. Polls, however, show that a majority of Californians favor legalization and taxation of the drug, with nationwide numbers trending in the same direction.

The Obama administration, for its part, seems content to let states decide for themselves how to deal with marijuana. Shortly after taking office, Attorney General Eric Holder announced the president’s decision to end federal prosecution of state-approved medical marijuana dispensaries, dozens of which were closed under the Bush administration.

Since California became the first to regulate the sale and possession of the drug for its therapeutic effects in 1996, 13 other states have joined it. If the measure for outright legalization passes, lawmakers around the country may come to see pot as the perfect medicine for dwindling state bank accounts.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.

Show Comments

Back to Top