Pubdate: Thu, 08 Jul 2010
Source: San Francisco Chronicle (CA)
Page: C - 1
Copyright: 2010 Hearst Communications Inc.
Contact: http://www.sfgate.com/chronicle/submissions/#1
Website: http://www.sfgate.com/chronicle/
Details: http://www.mapinc.org/media/388
Author: Kevin Fagan, Chronicle Staff Writer
Cited: Proposition 19 http://www.taxcannabis.org/
Referenced: The Rand study http://www.rand.org/pubs/occasional_papers/OP315/
Bookmark: http://www.mapinc.org/find?115 (Cannabis - California)
Bookmark: http://www.mapinc.org/topic/Proposition+19

HIGH TIMES WITH LEGALIZED POT? IT ALL DEPENDS

SAN FRANCISCO -- If recreational marijuana is legalized in 
California, prices of the drug
could plummet 80 percent and the number of dope-smokers would rise,
but the amount of money the state would bring in through taxes and
fees is a big question mark, according to a study released Wednesday.

What's more, while the state could save more than $300 million a year
by not enforcing laws outlawing weed, it may lose that much or more in
federal funding if Washington decides to punish California's defiance
of the U.S. prohibition of dope, the study found.

The upshot of the six-month study by the nonpartisan Rand Drug Policy
Research Center is this: It's anybody's guess as to whether the state
will suffer or prosper if voters approve Proposition 19 on the
November ballot. The measure would allow local governments to regulate
and tax pot sales and controlled cultivation, and to let adults over
21 possess as much as an ounce.

"There is just so much uncertainty, that while we could look at the
data and create a scenario that could be very good from an economic
standpoint, we could also create a very bad one," said Rosalie
Liccardo Pacula, co-director of the Rand center in Santa Monica. "The
overall effect is a bit of a mystery."

Foes of the ballot measure say legalizing casual cannabis use will
lead to pot farms everywhere, rampant drug use and dangerous dopers on
the highway. Proponents say cannabis is no more dangerous than
alcohol, and that bringing California's biggest cash crop - an
estimated $14 billion a year - out of the shadows of illegality will
create jobs and inject millions of dollars into governmental coffers.

Pacula and her four fellow researchers, who included UC Berkeley law
Professor Robert MacCoun, wrote that it is entirely possible that the
state Board of Equalization was right when it estimated the state
could reap $1.4 billion in taxes if a now-stalled bill in the
Legislature to legalize pot is passed.

But given that the industry is largely still illegal, despite the
decriminalized medical marijuana trade, fully assessing whether that
figure is realistic is not possible, they said.

It's even tougher to predict Proposition 19's economic effects, the
study said, because each of the state's 478 cities and 58 counties
would be allowed to decide for themselves whether to tax or ban pot.

On one hand, the researchers said, a Wine Country-style tourism trade
could be a bonanza to a marijuana-growing area such as Mendocino, and
the craft of making pot-infused food could thrive. Legality would also
bring social acceptance, driving up use, which in turn would drive up
sales and tax revenue.

At the same time, however, the very act of legalizing pot would drive
down the price of high-grade marijuana from about $375 per ounce to as
little as $38 per ounce, Pacula said. That would depress the expected
tax revenue, unless demand goes up astronomically.

The Rand study said marijuana consumption could rise by 50 percent or
more if pot is cheaper and more readily available.

Pacula added that if local jurisdictions tax marijuana heavily,
growers might be driven back underground - again, undercutting tax
revenue.

"There is no place in the world where the wholesale production of
marijuana is legal," Pacula said. "So the economic literature that
exists about marijuana usage in relation to prices and changes in law
is all about small changes, not the wholesale changes like what is
being proposed." 
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MAP posted-by: Richard Lake