The American Spectator : Is California Going to Pot?

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Is California Going to Pot?

By Peter Hannaford on 7.12.10 @ 6:07AM

Will drug legalization result in greater tax revenues?

Fiscally, yes; smoking, probably not. California marijuana enthusiasts gathered enough voter signatures this spring to put an initiative on the ballot that would, if passed, make it legal for adults to have small amounts of pot for recreational use and for counties and cities to decide if they want to license and tax commercial sales of it.

In the shadow of a recession, the big selling point is that legalization of marijuana would bring large amounts of new tax money into the depleted treasuries of counties and cities. The state government, being broke, makes matters worse for the locals by regularly failing to pay funds due them for various mandated programs.

While local jurisdictions would welcome new revenue, many are not enthusiastic about attempting to license, regulate, and tax legal marijuana sales. And, more than a few growers are downright hostile to the legalization measure (Proposition 19 on the November ballot), partly in fear it will encourage competition and partly in fear prices will plummet as a result of legalization.

A new study from the RAND Corporation's Drug Policy Research Center seems to bear out the second fear. It says that pot could drop in price from $375 an ounce to about $38, a tenth as much. Such a steep price drop would mean that dreams of large new pools of tax money would remain just dreams.

The study notes that if California became a magnet for "marijuana tourists," who could buy it in coffee shops and drug stores, revenue would get a boost. Whoa. Regulations might also limit sales to customers who could prove they are California residents (as has been the case for several years with medical marijuana sales in the state). Worse, federal law still classifies marijuana as an illegal drug, and if a grower were to decide to go "above ground," packaging and distributing his product through retail outlets, he might find himself the recipient of a raid from the federal Drug Enforcement Agency.

Further clouding the picture are the latest results on Proposition 19 from the Field Poll, the granddaddy of California polls. It shows 44 percent of voters in favor of the legalization measure and 48 percent opposed, with only eight percent undecided. There is a time-tested rule of thumb about election initiatives in California: If a proposal is at or barely above 50 percent at the beginning of the campaign it will almost certainly lose, since support tends to wane as the campaign goes on and many early undecided voters will end up opposing the measure on the grounds of "better the devil I know than the devil I don't." Unless Prop. 19 enthusiasts can turn history upside down, California will wake up on November 3 to news that, so far as marijuana is concerned, it is status quo ante bellum.

About the Author

Peter Hannaford was closely associated with the late President Ronald Reagan for a number of years. His latest book is Reagan's Roots: The People and Places That Shaped His Character.

Letter to the Editor View all comments (49) | Leave a comment

Rev. Lauren Unruh| 7.12.10 @ 7:12AM

From our constitution, Amendment I:

Congress shall make no law respecting an establishment of religion, OR PROHIBITING THE FREE EXERCISE THEREOF [like smoking and growing pot]; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

Rev. Lauren Unruh
THC Ministry
Pleasant Hill, Ca
A Native American Church

Doug| 7.12.10 @ 10:36AM

That's the stupidest argument I've ever heard. What if a religion has as its core practice the murdering of babies, do you have a First Amendment right to do that as well?

Oops, bad example. As it turns out, the religion of Liberalism has established baby murder as a religious right entitled to constitutional protection. My bad.

Purple Lips| 7.12.10 @ 2:27PM

I agree 100%. At our shrine, our priestess consecrates cantelopes while smoking a half gallon water bong filled with Thai Stick. We all then indulge in a most pleasent pot luck dinner, as the entire congregation gets a case of the munchies.

Eric Cartman| 7.12.10 @ 11:34PM

Yeah. This is gunna work.

Will| 7.12.10 @ 7:26AM

The prohibition of drugs, not just cannabis, but all drugs, is destructively counterproductive. In the USA, a number of people are always going to want to smoke pot/sniff cocaine/whatever, and no amount of prohibition can stop that.
The prohibition of drugs massively pushes up the street price, meaning that a) junkies turn to crime to finance their habit, and, more importantly, b) the profits from the illegal drugs trade are staggeringly high due to the risks involved. Deadly narcotics gangs are prepared to fight to control the trade, which causes terrible destruction in countries like Mexico and Colombia. The "War on Drugs" has been going on since Nixon and has failed spectacuarly.
Legalisation will take drugs out of the hands of violent criminals and put it into the responsible hands of a tightly controlled market. It is the only solution in this unwinnable war.

jack| 7.12.10 @ 7:39AM

The failure of Republicans and many conservatives to recognize the damage of making drugs a crime has done is just stupid. We have wasted billions on War on Drugs. We have jailed an entire generation of african americans. How is weed different from alcohol? It is safer and causes less damage to the body. The argument that grass smokers will progress to more dangerous drugs is just as idiot as the old Domino Theory that got us into the Viet Nam war.

Leo Wilson| 7.12.10 @ 9:00AM

Your partisan complaint is specious. Leftist social democrats in office are as candidly in objection to legalizing drugs as Republicans are. Write your own representative and ask for his or her official stance.
Pot grows anywhere. If legalized, a few spendthrifts will buy name brand pot while the vast majority of users will just toss their seeds around and smoke it tax-free for the rest of their lives. It doesn't create a physical dependency, so people who don't get it won't even have a bad day at the office; they'll just wait until its available again without a shiver or sweat. Whomever is claiming that legal marijuana will generate massive tax revenues jus doesn't know what they're talking about.

Clinton nee Publius| 7.12.10 @ 11:07AM

You advocating continuing prohibition because it won't generate enough tax revenue?

Is that not specious or just hypocritical?

Leo Wilson| 7.12.10 @ 12:28PM

Not advocating continued prohibition, just pointing out that the basis of the post I replied to was a false as the premise of the story. Go ahead, leagalize marijauna... but don't expect or pretend that it'll generate additional public revenues. It won't.

Sam| 7.12.10 @ 7:57PM

Leo,
You are right that it won't generate 'massive' tax revenues. But let me tell you the additional benefits we in CA will get from legalizing weed:

1. Police Officers can focus on more serious crimes than pot users, possessors, and small growers.

2. The power of the drug cartels in Mexico will be seriously reduced because they make lucrative profits as long as weed is illegal.

3. The population of our overcrowded prisons will be reduced. Right now, 45 % of those in our state prisons are there for drug crimes.

4. It would also be nice income on the side for the average American. 9-5 at the office and growing a couple cannabis plants in the backyard (tongue-in-cheek)

Bill Hussein O'Stalin| 7.12.10 @ 8:18AM

If it is legalized it will most likely plummet to $3 an ounce or less, much less then the $38 mentioned in the article.

Dustoff| 7.12.10 @ 11:49AM

Then they will tax it...... anfd the price will jump. Next thing you know, some drug king is selling it for less and the gov doesn't get their cut. Watch what happens then.

Talk about a "Catch-22"

Pastor Jim| 7.17.10 @ 2:13PM

Let's not forget the Brian's:
Brian was an average kid with average abilities then once when he was 13 he tried pot with some peers and they got busted. Brian later went to college and studied accounting and his goal was to work for a bank. After graduating with an AS degree in accounting he applied to several banks who had advertised vacancies for entry level banking positions. Brian did very well on the initial interviews but when called back for follow-up interviews he was required to disclose his arrest information because of bank policy. Brian soon found out that his arrest at 13 years old for marijuana was a felony and as such it would stick with him the rest of his life thus destroying all his dreams of having a career in banking.
I sincerely believe that the punishment for smoking marijuana is too extreme for a freedom loving people like Americans.

Louis Jenkins| 7.12.10 @ 8:28AM

Dear Mr. Hannaford:

Thank you for the article. I had no idea what an ounce of pot was selling for in the Golden State. I do not think the legalization of drugs is the answer to California's fiscal problems. Oh yeah, it might work for a brief period of time, but then the legislature will continue to spend, and pretty soon they'd be right back were they started-busted.

Sam| 7.12.10 @ 7:58PM

Louis,
See my above post. Again, it is a combination of benefits that will provide aid to our state. Tax revenue is a small slice of that pie.

GregA| 7.12.10 @ 8:46AM

If California legalizes pot, they should increase tax on Twinkies,potato chips and cheese burgers.
The Munchies would be the real revenue generator.

Len| 7.12.10 @ 9:21AM

Aren't they already doing this?

Shawn| 7.12.10 @ 2:39PM

They just put a huge tax on candy in Seattle. They're next.

Len| 7.12.10 @ 9:30AM

2 points.

1) While the writer makes a good point about the likelihood of taxing marijuana failing to actually provide revenue, the money saved from going after drug users and sellers will be significant and may have a financial impact. There will be less court time, less police enforcement and investigation needed, less prison space needed, etc.

2) How is it that at one time the federal government actually prohibited alcohol consumption through changing the US constitution, but now apparently has discovered some power to prohibit personal consumption under "commerce"? I can only see states defying the federal government in it's continuous overreach as a good thing, and so those states ignoring unconstitutional actions by the federal government actually benefit all Americans.

Matt Morehouse| 7.12.10 @ 9:44AM

I like the idea if it would put the outlaw growers out of business by lowering prices and maybe make it safer to tramp the woods in Hunting season.

However any taxes generated will be wasted by the spend side of the ledger.

L. Ross| 7.12.10 @ 10:49AM

I've played in some rock bands, and known some pot heads. While pot does not destroy lives like heroin does, it does lead to a general lack of ambition. That said, the real debate should focus on the rights of individuals to enjoy their freedoms vs. the responsibility of the government to protect us from those who would deny us the right to enjoy our own freedom. In this argument, I think I come down on the pro-pot side. And no, I have never partaken.

Clinton nee Publius| 7.12.10 @ 11:09AM

Thank God excessive drinking doesn't lead to a general lack of ambition.

Alan K| 7.12.10 @ 10:55AM

I'm sure the price of marijuana would fall if it is legalized. Proponents of legalization have been making that claim for years, it's the black market that drives the prices up. If marijuana users suddenly aren't spending nearly as much money on marijuana then obviously they'll have money for other things and that might indeed help the economy. It's not really a question of economics though, it's a question of freedom. If you believe we all have the unalienable right to life, liberty and the pursuit of happiness then you'd better have a pretty good argument as to why if you're going to prohibit my pursuit of happiness.

aconcerncedcitizen| 7.12.10 @ 11:05AM

I cannot believe that pot would fall to $3 dollars an oz. I'm assuming that most who frequent this site don't or never have smoked pot (maybe a bad assumption) but an ounce of marijuana is A LOT of weed for $3. Even the biggest stoner would have difficulty smoking that in a week. Oz. today run from anywhere from $200 to $2000, with anything lower than $300 destined to be subpar quality. Is there really any evidence that legalizing weed would cause the price to drop that precipitously? That would make it way, way less expensive than cigarettes and I can't see that happening

Bobnormal| 7.12.10 @ 4:48PM

Bull-Crap, I get it all the time for 60$ an ounce, all the Chronic out there is an overpriced ripoff that all the "cool kids" buy at a ridiculous 3-400$ an oz. It doesn't get you higher like some in the media say, it just smells better, so take my pipe and Smoke It!

NORML| 7.13.10 @ 11:57AM

You are an idiot, keep smoking that bricked up mexican shit weed sprayed and grown with all kinds of cancer causing chemicals, mexico needs your money. The 'good' stuff is much more potent (this is a proven, measurable fact)

Stan Redmond| 7.12.10 @ 11:08AM

Argueing there will be some wonderful new tax stream coming in to the state coughers [sic] is not realistic. I don't think we're going to see growers of pot running to the local tax collector for a tax stamp and I don't see the people who grow pot in the closet declaring they have pot.

What WILL save taxpayer dollars is the endless pit of money thrown at anti-marijuana laws. Go ahead and attempt to tax the pot but the real savings will be in the police and prison industries. The big fight will be between the prison lobby and the "though on drug" politicians who will be forced to admit they have wasted billions fighting a drug with minimal impact on society. And I don't even smoke the stuff.

Clinton nee Publius| 7.12.10 @ 11:19AM

I was a medical marijuana patient for 7 years. Now I take another drug that helps me manage my chronic pain condition (I suffer from tension migraines, classic migraines and cluster migraine headaches - on almost any given day I have a tension migraine and I have a headache as I write this comment). The problems I faced are that I am a recovering addict, so I don't take opiates - I would just be an opiate addict and have headaches too. So scratch opiates. I use Excedrin Migraine as much as my liver will stand and sometimes I just suffer. The good news on pot was that it reduced the pain by 50% at least half of the time - making it every bit as good as opiates, without exposing me to the opiate addiction issues and side effects.

What do I do?

I live in Texas and medical marijuana is illegal so my treatment was illegal and growing my own medicine was illegal. It was hard sleeping at night when I had a grow going, let me tell you. My wife was concerned and I was too - knowing full well that a bust would be a complete catastrophe. I would have no defense and have to plead guilty in order to spare my family from prosecution. When the police came, they ignored it all. They knew what was going on and turned a blind eye.

I support legalization, but only with the caveat that we do not use taxpayer funds to pay for rehabilitation for addicts. They claim they want the freedom to do as they please - fine. Legalize all drugs and if you want to dry out, then you should be the one paying for the consequences of your decisions and not us.

Even freedom has consequences.

ACynic| 7.12.10 @ 12:14PM

Yep, pot sales will result in more revenue for Calif., but this will make zero difference to the fiscal mess in Calif.
For every dollar pot taxes bring in, Calif. pols will spend 2 bucks.
And therein lies the problem in Calif., in the Fed. Gvt., and most state govts.
100 trillion dollars can fall out of the sky and land in Calif today, and by tomorrow, they will allocate 2 trillion for spending. Ditto for the federal gvt.
The only way for Calif to cure itself of its mess, is literally bankruptcy.
Maybe then will the pols learn - though I doubt it - that you cannot spend money forever that you do not have.

Alan K| 7.12.10 @ 12:46PM

Don't you think that dropping the prosecution and jailing of hemp smokers will reduce the cost of government?

UpChuck.Liberals| 7.12.10 @ 7:35PM

Have you ever tried to keep a hemp rope lit? Give me a break, todays weed far surpasses hemp, the miracles of genetics and selective breeding.

Northern Rebel| 7.12.10 @ 12:48PM

I enjoy this discussion, when talking to a pro-abortion, anti-pot person. (Yes, they are out there!)

People have the right to rip a living child from it's protective womb, and exterminate it, but you can't smoke something God created in the Earth.

For my part, I haven't indulged in many years, but at age 52, I have yet to hear of a fatality, from ingesting the smoke of this organic substance.

I also have never heard of anyone waking up in another state, wearing someone else's clothes, with no money, under a bridge, because they smoked a joint!

I say legalize it, sell it in liquor stores to adults, and let the cops do more important things!

Jeff| 7.12.10 @ 1:44PM

Having lived in the Netherlands for a short time, I can't imagine why that model isn't followed. There are some drugs that can really do some damage, but pot ain't one of them. Does it promote laziness? You betcha! So does watching TV. I quit smoking once I graduated from college, but many of my friends still smoke and I have no problems with it. I am pro-legalization just so we can quit with the sham of the "war on drugs". Once it passes, I am very bullish on delivery pizza chains!!!!

Purple Lips| 7.12.10 @ 2:35PM

Jeff,
You will be pleasently surprised that in Amsterdam, the Islamic majority has done wonders to rid that once wonderful city of its junkies, sodomites, and fornicators. There was once a world famous "gay friendly" hotel there that has been renamed the Mohammad Inn. Perhaps a few TVs still visit the place; but, then again that'd be wearing burkas.

And in a few decades, Holland will resume its medeval past, where chasity belts, public prayers and public beheadings are a common occurance.

Jeff| 7.13.10 @ 4:41PM

WOW....I guess I am not surprised. The religion of peace is at it again. I lived in Leiden in '96, so I guess in the span of 14 years a lot can change. I just really enjoyed the vibe of the country...where pot wasn't such a grandiose problem. It was regulated and contained and not a big deal. In fact, the Dutch students that I studied with actually mocked us foreigners that came to their country and smoked pot. So really, the policy of tolerance actually contributed to most normal people shunning the practice. Remove the allure of 'doing something naughty' and you remove half the fun.

Conservative Christian| 7.12.10 @ 3:44PM

All of the prohibitionists’ arguments boil down to a single point: If my child gets a little off track and starts using marijuana, the prohibitionists want to put them in PRISON. Prison is not good for my kids or for yours, and it’s much worse than the effects of marijuana, so we can pretty well disregard all of the prohibitionist nonsense about keeping it illegal “to protect the children.” I hope my kids steer clear of marijuana, but I REALLY hope that if they do use a little marijuana, they don't end up in prison.

If you're a California citizen (or if you want to pass this along to any California citizens), Californians can register to vote at w w w . sos.ca.gov/elections/elections_vr.htm by completing the online form and mailing it to the address on the form.

Ken (Old Texican)| 7.12.10 @ 4:09PM

WOW! guys.

Let me re-fill my scotch and I will be right back with you.
OK, that's better.

Please, (slurp), correct me if I am wrong, but don't the same gangsters that sell pot ...also sell the coke and heroin and the meth?

I say shoot 'em all...on sight. Save money on trials and prisons.
Maybe we could have "open seasons" and test the number of kids ruined on season and off season to see about further action.

UpChuck.Liberals| 7.12.10 @ 6:26PM

Finally a common sense solution.

As a citizen of the Peoples Republik of Kalifornia we've got enough dead heads around here without adding more drugs.

What I think is funny is that the THC levels in todays weed are way the heck higher than back in the '60's, yeah it don't mess you up. B$

lorraine | 8.16.10 @ 10:35PM

considering you spelt california wrong im subject to believe everything in your comment is false.

and its not the thc level, its how much you decide to smoke.

p.s. I love how you referred to pot as a "drug". I guess that means the creator of the earth supplied humans and animals with DRUGS before Christ was born?

lorraine| 8.16.10 @ 10:40PM

so shoot the innocent americans who sell weed everyday (probably half of your child's facebook buddies), shoot the cancer and aids patients using it as medicine? its funny how close minded people are, marijuana is used by more than just welfare families and criminals. think of your kids, grandkids and previous ancestors. would you shoot them texas boy? last time I checked, murder got you a few more years in prison than smoking a joint does.

Kellee| 7.12.10 @ 4:57PM

The government had no right to ever make pot illegal, but it was more advantageous for the dirty politicians. You had massive government growth to enforce the law then you had all the lovely pharmaceutical companies pushing their drugs, reaping the benefits from all the honest citizens or scared citizens that do not dare stand up to the government for its complete violation of their rights for fear of being labeled an addict or fear of having everything taken away so instead they pay for a doctor and pay for a Prozac that way they're being a responsible American citizen with some unfortunate imaginary disease or phobia. So you have the DEA, the police, the jails, the doctors, the pharmacists, the drug companies and the politicians (via their own personal investments in these companies and their associations with these companies) and you're making a nice chunk of money. Now they see the error in their ways. Not the fact that they were defying the Constitution by creating such a law to begin with, but that they could have that much more money by making it legal. You will have plenty of people still committed to their Prozacs and Valiums and now a whole new wing is opening up for the pot lovers to buy their weed in pretty little packages with the Surgeon General warning on it and a 40% tax, but everyone is happy because pot’s finally legal and cheaper, a state’s been saved and the politicians will get their money.

Dave| 7.13.10 @ 12:44AM

I think the study is BS of the highest order. We will get public revenue for marijuana if it's taxed, and it's not going to have that much of an effect on marijuana prices. First, growing good pot is not easy.

Second, the price for pot in CO, NM and CA is flat about 450$ an ounce, and this is after the first baby steps of legalization (aka Medical MJ growers and state sanctioned dispensaries with no real medical or legal oversight).

The Netherlands are an even better example; for all intents marijuana is totally legal (and is a major source of tourist income in Amsterdam) and the price pre gram is flat at 12.2 euro! Per ounce this comes to about 350 euro or about 435 dollars US.

See, the global retail price for marijuana is strangely enough flat (legal or not) at about 430-500 dollars an ounce, and taxation at a reasonable rate of say 5% would be a welcome thing (with most "legal" growers in the medical marijuana industry).

Taxation means legal recognition, and as a result the Fed would be even less likely to bust legal state sanctioned operations. This is not to say that their will not be State revenuers busting people that are attempting to bypass the legal tax. (Think about Moonshiners in the South).

But, most people will not go through the trouble of buying something illegal if getting it legal is not difficult. Why would anyone risk their livelihood on street weed, with questionable quality, when you can buy legal marijuana in your local store and get exactly what you paid for, every time.

(When was the last time you bought illegal moonshine for that matter? Think about it..)

Patrick Haueter| 7.13.10 @ 11:41AM

Preachers, teachers, white collar, blue collar… All kinds of people are entering this emerging marketplace! – Here's a Special Report by CNBC: http://www.cnbc.com/id/36033554 - For more Cannabis- Marijuana- Hemp news and gossip, find me on Twitter: HempNetworker

Leonard Krivitsky, MD, DD| 7.13.10 @ 11:55AM

It is interesting that the opponents of Prop. 19 call themselves "Public safety first". And this is when it has been conclusively shown by experts that Cannabis use suppresses violent behavior (as opposed to alcohol), and that Cannabis can even be potentially useful in addiction treatment, that is in helping people stay off booze and dangerous hard drugs or prescription drugs. Mexican drug cartels also oppose Legalization because if Cannabis is legalized all their illegal distribution networks are no longer needed. Recent scientific Conference in LA also stressed that current situation is unacceptable and unsustainable, and that it is supported by "prison-industrial complex" in this country because those are the people who benefit financially from more prisons and more prisoners. The so-called "public safety first" campaign against Proposition 19 is simply not entitled to use this name for their lies and distortions, because if we talk about "public safety", it is the supporters of Prop. 19 and not its opponents who really care about it. Public safety will be much better served if the Proposition passes, rather than if it fails!

Primo| 7.13.10 @ 5:12PM

Mr. Hannaford's bias shines forth like a 1000 watt bulb.
Who is he trying to convince that Prop 19 will fail?
Himself?

Dekatu| 7.13.10 @ 11:07PM

Everyone has missed the point that if cannabis(marijuana) is legalized, cannabis(hemp) is also freed from the restrictions now placed on this plant. Cannabis is the only plant that can be used in natural for every placed into the drug scheduling system. Because the two (or more) varieties of the plant are indistinguishable without laboratory analysis, the commercially viable Hemp, which cannot get one "high" is also made illegal. While taxes charged for the marijuana may not prove to be big business, the hemp industry in the country is. Currently all hemp has to be imported. Look up the numbers. You will be surprised.

May May| 7.14.10 @ 1:22AM

Right now, Cali already is a haven for marijuana users. Everyone and their cousin sells weed or knows at least three guys who do. http://stonerdiary.wordpress.com

CC| 7.15.10 @ 1:40AM

The $38 or $3 an ounce predictions are simply insane. For starters, growers have hard costs. Then you have distribution, storage and sales costs.

But beyond that, when has the government ever regulated and taxed something and caused it to go down in cost and increase in supply?

Keep in mind as well that even if the referendum were to pass, it would still be illegal under federal law (adding even more hard costs).

At a time when individual liberty is under attack more than ever before, I am at a loss to understand why more conservatives are not in favor of decriminalization of marijuana.

The social costs of the use of marijuana are far less than alcohol. The public financial and social costs are all due to the impact of enforcement.

Pastor Jim| 7.17.10 @ 2:01PM

We can not afford to question the reasoning of American's founding fathers. The annals of history provide the resulting evidence of this paradigm for those wise enough to see it. For that reason I firmly stand with Abraham Lincoln "A Prohibition law strikes a blow at the very principles upon which our government was founded." Amen