Legalizing Marijuana in California Worth $1.4 Billion a Year in New Revenue, Says State Board of Equalization

The California State Board of Equalization (BOE) today released its analysis of AB 390, a bill introduced by San Francisco Assembly Member Tom Ammiano to tax and regulate marijuana like alcohol. The analysis concludes that the state would generate $1.4 billion dollars in new revenue, a slight increase from BOE Chair Betty Yee’s preliminary estimate in February.

“The Board of Equalization has confirmed that marijuana already plays a huge role in the California economy, but unfortunately it’s underground and totally out of the state’s control,” said Stephen Gutwillig, California state director of the Drug Policy Alliance. “Assemblyman Ammiano is right to propose harnessing that market and allowing the state to redirect scarce criminal justice resources to matters of greater public safety. It’s time to rethink our unenforceable pot laws and take the marijuana market back from the cartels and regulate it effectively.”

The BOE analysis factors in that “legalization of marijuana would cause its street price to decline by 50 percent” and concludes that the impact on state revenue of the bill’s provisions for strictly limited personal cultivation “is likely to be minimal.”

This report on the fiscal impact of AB 390 amplifies the escalating national discussion of marijuana policy and alternatives to decades of failed prohibition. A television ad by Marijuana Policy Project, explicitly calling for California to address its catastrophic fiscal crisis by taxing pot, recently made headlines across the country. Several local TV stations rejected the spot as too controversial, only fueling this once-taboo debate. Meanwhile Northern California activists, led by medical marijuana entrepreneur Richard Lee, aren’t waiting for Sacramento to act; they have drafted a voter initiative to tax and regulate marijuana in California and may begin gathering signatures to qualify for the 2010 ballot.

“Momentum to radically change direction in marijuana policy grows by the week, especially here in California, the state that led the nation in adopting medical marijuana,” said Gutwillig. “As this state’s fiscal crisis worsens a growing majority of Californians are demanding taxation of our state’s largest cash crop. We can’t borrow or slash our way out of this deficit. The Legislature must consider innovative sources of new revenue, and marijuana should be at the top of that list.”