California Lawmaker Sees Tax Revenue in $14 Billion Marijuana Crop

Press Release February 22, 2009
Media Contact

Tommy McDonald at or Stephen Gutwillig at (323) 542-2606

At a news conference in today in his home district, San Francisco Assemblyman Tom Ammiano announced the introduction of a bill to tax and regulate marijuana like alcohol in the state of California. Advocates cheered the commonsense proposal, which comes during an historic economic crisis and just after one of the toughest state budget negotiations on record.

“With the state in the midst of an historic economic crisis, the move towards regulating and taxing marijuana is simply common sense. This legislation would generate 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,” said Ammiano. “California has the opportunity to be the first state in the nation to enact a smart, responsible public policy for the control and regulation of marijuana.”

Marijuana is California’s number one cash crop, according to federal estimates, worth double the state’s vegetable and grape crops combined — or about $14 billion a year. The Ammiano legislation would create a regulatory structure for that market similar to that for beer, wine and liquor: it would regulate taxed sales to adults while barring sales to or possession by those under 21. Estimated annual revenue from fees and sales and excise taxes under the proposed regulations runs into the billions of dollars.

“Marijuana already plays a huge role in the California economy. It’s a revenue opportunity we literally can’t afford to ignore any longer,” said Stephen Gutwillig, California state director for the Drug Policy Alliance. “It’s time to end the charade of marijuana prohibition, tax the $14 billion market, and redirect criminal justice resources to matters of real public safety. Assemblyman Ammiano has done the state an enormous service by breaking the silence on this commonsense solution.”

Multiple local jurisdictions in California have voted to make marijuana the “lowest law-enforcement priority”. Nonetheless, marijuana arrests in California have actually increased recently. According to state figures, California’s marijuana arrest rate increased 17.7 percent in 2007, while arrests for all other controlled substances fell.

“By far the greatest harms associated with marijuana are arrest, imprisonment, and other penalties that accompany prohibition. More than 74,000 Californians were arrested for marijuana offenses in 2007, nearly 80 percent of them on misdemeanor charges,” Gutwillig said. “This costs $1 billion a year and taxpayers are footing the bill, while black marketers control the flourishing market and laugh all the way to the bank.”

Advocates point out that thirteen states already regulate medical marijuana. Moreover, California collects taxes on various aspects of the medical marijuana enterprise. The federalist structure of our government expressly permits states to fashion their criminal laws or lack thereof, free from federal government interference.

A young woman holds a sign that says "End the Drug War."

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