Prop 19 May Not Be Such a Great Way To Bring In California Tax Revenues After All

While California legislators may be licking their lips at the thought of taxing marijuana – should California voters go all in on Prop 19 next month – a new RAND Corporation paper points out that the revenue impact on Mexican gangs could make much less of a bang than assumed by Prop 19 proponents.

The reasoning behind 19 is simple: California prisons are already packed with all sorts of shady individuals and locking up small-time pot dealers with murderers, gang-bangers and child molesters really only creates a criminal factory that costs our already broke state way too much money. Eliminating a large chunk of the criminality surrounding pot frees up correctional resources to put rverts and killers. So far that makes sense.

Legalizing marijuana also gives our sneaky little legislators the chance to tax the shit out of a multi-billion dollar business; they have already done this in cities like Oakland where pot dispensaries are limited and closely watched by TPTB to assure they get their cut. Implement this state-wide and maybe we won’t be so desperate to get into selling our stuff off and mailing out IOUs instead of actual money.

Or were we totally high when we came up with revenue estimates that promise $1 billion in extra cash for the state?


The RAND paper argues that California accounts for 1/7th of marijuana consumption in the U.S., much of which is grown, cultivated and sold here in the state. That isn’t money that will be taken out of Mexican drug traffickers’ pockets if Prop 19 passes as we Californians are already weed snobs and don’t smoke the Mexican garbage. What we have is a large black market subsidized by semi-legal pot funneled through dispensaries. Some locales tax it while others don’t under current rules and it appears as though Prop 19 leaves the same door flapping wide open in the breeze. Not exactly the big tax boom we’d hoped for.

Opponents argue that legalization of marijuana will actually backfire as the free market price of an ounce could drop to $38; great if you’re the one buying but not so great if you’re the one trying to make money off of your crop and now forking over taxes to the state.

Is there anything in Prop 19 that would actually require growers and buyers to bypass the underground market they have known for so long and give their share of taxes to the state? Not as far as I can tell.

Think of it this way: if the state suddenly started taxing soda at 10 cents a can and you knew a guy in your neighborhood who happened to be sitting on a stockpile of Pepsi, why on Earth would you go to the store and pay the additional 10 cents a can when you could simply unload a case or two from your neighbor at a lower price? The difference being there’s already a black market for pot and introducing consistent tax issues into the matter is certainly not the way to legitimize said black market.

Governor Schwarzenegger has already signed a bill into law that makes possession of less than an ounce an infraction ($100 fine) while SFPD cops are already taught to ignore casual pot smoking on San Francisco streets (just like everything else they ignore including defecation and rampant dysfunctional drug use) so why 19?

I don’t have an answer for that. On the surface Prop 19 seems to be a no-brainer but like any other piece of California legislation, it’s all in the implementation and I don’t believe our state can pull off the tax revenue payday they are banking on should California voters vote yes on November 2nd.

Or maybe all the stoners will stay home and get high on Election Day instead, having already decided this is a bad idea and not at all what it seems to be at first glance.

While California legislators may be licking their lips at the thought of taxing marijuana – should California voters go all in on Prop 19 next month – a new RAND Corporation paper points out that the revenue impact on Mexican gangs could make much less of a bang than assumed by Prop 19 proponents.

The reasoning behind 19 is simple: California prisons are already packed with all sorts of shady individuals and locking up small-time pot dealers with murderers, gang-bangers and child molesters really only creates a criminal factory that costs our already broke state way too much money. Eliminating a large chunk of the criminality surrounding pot frees up correctional resources to put the smack down on perverts and killers. So far that makes sense.

Legalizing marijuana also gives our sneaky little legislators the chance to tax the shit out of a multi-billion dollar business; they have already done this in cities like Oakland where pot dispensaries are limited and closely watched by TPTB to assure they get their cut. Implement this state-wide and maybe we won’t be so desperate to get into selling our stuff off and mailing out IOUs instead of actual money.

Or were we totally high when we came up with revenue estimates that promise $1 billion in extra cash for the state?


The RAND paper argues that California accounts for 1/7th of marijuana consumption in the U.S., much of which is grown, cultivated and sold here in the state. That isn’t money that will be taken out of Mexican drug traffickers’ pockets if Prop 19 passes as we Californians are already weed snobs and don’t smoke the Mexican garbage. What we have is a large black market subsidized by semi-legal pot funneled through dispensaries. Some locales tax it while others don’t under current rules and it appears as though Prop 19 leaves the same door flapping wide open in the breeze. Not exactly the big tax boom we’d hoped for.

Opponents argue that legalization of marijuana will actually backfire as the free market price of an ounce could drop to $38; great if you’re the one buying but not so great if you’re the one trying to make money off of your crop and now forking over taxes to the state.

Is there anything in Prop 19 that would actually require growers and buyers to bypass the underground market they have known for so long and give their share of taxes to the state? Not as far as I can tell.

Think of it this way: if the state suddenly started taxing soda at 10 cents a can and you knew a guy in your neighborhood who happened to be sitting on a stockpile of Pepsi, why on Earth would you go to the store and pay the additional 10 cents a can when you could simply unload a case or two from your neighbor at a lower price? The difference being there’s already a black market for pot and introducing consistent tax issues into the matter is certainly not the way to legitimize said black market.

Governor Schwarzenegger has already signed a bill into law that makes possession of less than an ounce an infraction ($100 fine) while SFPD cops are already taught to ignore casual pot smoking on San Francisco streets (just like everything else they ignore including defecation and rampant dysfunctional drug use) so why 19?

I don’t have an answer for that. On the surface Prop 19 seems to be a no-brainer but like any other piece of California legislation, it’s all in the implementation and I don’t believe our state can pull off the tax revenue payday they are banking on should California voters vote yes on November 2nd.

Or maybe all the stoners will stay home and get high on Election Day instead, having already decided this is a bad idea and not at all what it seems to be at first glance.

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