Legal Pot Could Generate $1.4 Billion in Revenue, Tax Board Says
California could see a nearly $1.4 billion per year increase in state revenues were it to legalize marijuana, the state Board of Equalization says in an analysis of pending legislation to to do that.
The bill (Assembly Bill 390) by Assemblyman Tom Ammiano, D-San Francisco, is still awaiting its first committee hearing and is likely not to be considered until next year. It would impose not only sales taxes but a $50 per ounce fee on marijuana sales, which would be licensed by the state much as alcoholic beverages are regulated.
Today, although considered illegal by federal authorities, California allows limited sales of marijuana for medicinal purposes, subject to local control, in accordance with a ballot measure approved by voters in 1996. And the state imposes sales taxes on those pot transactions. But wider sales would, under the Ammiano bill, be dependent on federal permission.
California is considered by federal authorities to be the nation's top marijuana producing state with 8.6 million pounds a year, valued at $13.8 billion, making it one of the state's largest agricultural crops, much of which is exported to other locales.The Board of Equalization analysis concludes that assuming 16 million ounces of marijuana consumption in California a year, legalization under AB 390 would generate $990 million from the $50 per ounce special levy and $392 million in sales taxes.
"We can no longer afford to keep our heads in the sand when it comes to marijuana," Ammiano said in a statement. "The move towards regulating and taxing marijuana is long overdue and simply common sense. The benefits of regulation are clear - controlling marijuana would generate up to $1.3 billion in much needed revenue for the state, restrict access to only those over 21, end the environmental damage to our public lands from illicit crops, and improve public safety by redirecting law enforcement efforts to more serious crimes.
"It defies reason to propose closing parks and eliminating vital services for the poor while this potential revenue is available. California has an historic opportunity to be the first state in the nation to enact a smart, responsible public policy for the control and regulation of marijuana."
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