States Debate Tax Pros of Full Marijuana Legalization

As California, and Los Angeles right now in particular, wrestles with the issue of legalized marijuana for medicinal purposes, some states are advancing to the issue of full-scale legalization of the drug. upinsmoke.jpg

Our Los Angeles marijuana lawyers understand this would mean legalization of the drug for recreational purposes.

Right now, 17 states, including California, as well as the District of Columbia, have legalized marijuana for patients who have certain ailments and have a doctor’s permission to use it.

But voters in three of our neighboring states will be deciding this November whether to pass a full-scale legalization within state borders.

There’s a complicated back-and-forth that goes with this, and both sides bring legitimate points to the table.

One one hand, you have the pro-pot advocates, who say that this could be a major windfall for states that are cash-strapped and looking to cut major services, such as police, fire and education. Plus, these states could expect to see a significant reduction in the costs to incarcerate marijuana law violators, many of who are often locked up for non-violent, possession-related offenses.

In Denver, some advertisers are pitching it as an opportunity to create new jobs and generate money for struggling school districts.

On the flip side, even such a measure passes, the story is unlikely to end there. First, just look at the struggles California has endured with multiple rounds of legal battles and the establishment of potentially pricy bureaucracies that would be required to oversee the cultivation and trade.

In Colorado, state analysts are projecting tax boosts of somewhere between $5 million and $22 million annually. One pro-pot group even posits that it could generate as much as $60 million a year within five years.

In Oregon, you have a measure dubbed the Cannabis Tax Act. This would mandate that 90 percent of the funds generated from the sale of recreational marijuana would go directly into the state’s general fund coffers. There haven’t been any definitive estimates on how much this would hold down, due to the many variables, but it’s also estimated the state would save as much as $2.5 million each year in prison costs.

In Washington, the pro-marijuana campaign is promising that more than half of all the tax revenue would go to substance abuse prevention and research, as well as health care and education. Analysts there have said that as much as $2 billion could be raked in over the next five years.

While there are certainly many aspects to consider and legal kinks that will need to be ironed out, we need to consider whether our current status quo is working. A strong argument could be made that it isn’t, given that the majority of profits for recreational use are currently funneled to violent, underground drug cartels.

We don’t know at this point exactly how much money can be generated because, honestly, we don’t know exactly how many people are buying weed on the black market. Analysts are able to make a fairly educated guess based on arrest logs, but those are only going to show a fraction of the actual use. Plus, it doesn’t account for those who don’t use it now, because it’s illegal, but who might if they could obtain it without fear of arrest.

As we battle with our own issues in California, we’ll be watching how this issue unfolds in these nearby states.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 714-937-2050.

Additional Resources:
Pot could be tax windfall, but skeptics abound, Sept. 19, 2012, By Kristen Wyatt and Jonathan J. Cooper, Associated Press
More Blog Entries:
CANNABIS LAW GROUP’s Collins Collective Lawsuit Targets LAPD, Sept. 4, 2012, Los Angeles Marijuana Lawyer Blog