The Audacity of Dope
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The Audacity of Dope
Could legal marijuana save California’s economy?
By Jeff Segal
Posted Wednesday, February 11, 2009 - 10:36am
Olympic swimmer Michael Phelps has made marijuana a popular topic. He was photographed smoking from a bong, lost corporate sponsorships, and was suspended from the sport as a result. But celebrities aren't the only ones thinking about dope.
Some legislators in California have pot on their minds, too. That's because the government of the biggest economy in the United States is facing a massive budget deficit whose pain would be alleviated by decriminalizing marijuana.
California's current deficit stands at a whopping $15 billion and is expected to reach $42 billion next year. And the state run by Gov. Arnold Schwarzenegger has virtually run out of cash. It recently delayed $3.5 billion of payments to taxpayers and counties.
While nearly all U.S. states currently face budget shortfalls, California's deficit is more than one-third of its general fund. That's largely due to its dependence on income taxes, which slide during a recession. And the state can't easily borrow due to the government bond-market freeze. Moody's even warned it may downgrade the state's rating.
There's no easy fix to the problem, as any solution likely requires cutting benefits and social services—tough political choices for Schwarzenegger. But the state does have an abundant natural resource it may be able to draw on for help.
Marijuana is California's largest cash crop. It's valued at $14 billion annually, or nearly twice the value of the state's grape and vegetable crops combined, according to government statistics. Indeed, a recent report pegged marijuana as two-thirds of the economy of Mendocino County, a ganja hotbed north of San Francisco. That's not surprising—it costs $400 to grow a pound of pot that can sell for $6,000 on the street.
But the state doesn't receive any revenue from its cash cow. Instead, it spends billions of dollars enforcing laws pegged at shutting down the industry and inhibiting marijuana's adherents. Of course, there's a reason for that. Marijuana's social costs may include addiction and rehabilitation treatment and lost productivity. Yet these are minute compared with the extensive social costs of alcohol or tobacco.
Of course, just legalizing pot wouldn't automatically harvest revenues for the state. An organized system of regulating sales and collecting taxes would need implementing. And it's possible that general drug use could rise, though the debate that pot is a gateway drug to harder substances is inconclusive.
There's also the question of whether or not taxing marijuana would simply create a black market that would again skimp the state on taxes. The best corollaries here are cigarettes and alcohol. Rises in "sin taxes" on them have decreased consumption—a positive—but don't seem to have destabilized the legal market. Decriminalization could lead to some job losses in law enforcement, though the countervailing argument would see these forces put to work stopping harder crime.
So what are the numbers? A national legalization effort would save nearly $13 billion annually in enforcement costs and bring in $7 billion in yearly tax revenues, according to a study by Harvard University economist Jeffrey Miron. Since California represents 13 percent of the U.S. economy, those numbers suggest the state could save $1.7 billion in enforcement costs and nab up to $1 billion in revenues. That doesn't include any indirect revenues as, for example, rural farming communities grow or marijuana tourism, which has been lucrative for the Netherlands, takes off.
Put it all together, and California could potentially wipe some $3 billion off its budget deficit by letting its people puff and pay. That still leaves it with a gaping $39 billion hole to fill, so the state's problems go far beyond what a new cash crop can fix. But anything to help soothe the state's chronic fiscal pain—even if unpalatable to some—is worth considering.
Comments
Legalizing pot
slhfisher said it's ironic that the state with the most restrictive cigarette laws would consider legalizing another form of smoking. The main purpose of the cigarette smoking restrictions is to protect the rights and health of non-smokers. A secondary purpose is to decrease societal costs for the diseases created by cigarette smoking. If pot is legalized, I'm sure people won't be toking up in the local post office lobby or supermarket. People who don't want to be exposed to it wouldn't. I despise cigarettes and what they do to people, but I support their right to smoke them. Same should be true for marijuana
Legal weed
Legalizing marijuana certainly has an impact on other industries, yet I think as with any change, industries adapt. (The cotton farmer would convert crops, etc.) The "weed" user of the 50's and 60's were seen by many government leaders as a threat to the ideals of the status quo, they were the "hippies", the "trouble makers', they were a pain in the rear. There was also the strong belief that marijuana was the precursor to use of other harder drugs. At the time, alcohol and prescription drugs were not seen as an influencer. Weed continues to be used as much, or perhaps more, than it was years ago, that hasn't changed. Unfortunately, for those unlucky ones that have smoked and gotten caught, it is on a criminal record. That leads to the inability for employers with certain required regulations not to hire them as they have a "criminal history". The individual can be the most incredible, self motivated, hard working person in the world, but the "record" negates that. I do believe marijuana should be re-evaluated for legalization for many reasons. Controls should be put in place. However, I do not believe it is a huge answer to California's ongoing deficit problem.
Hemp-aganda
What Artemis Gordon missed is the fact that the article is about smoking cannabis, not textile cannabis.
The hemp variety of the cannabis plant is not the same variety as the cannabis plant that is desireable for smoking. The hemp plant has such a significantly lower THC content that it is a complete waste of time trying to smoke it.
That's the fact that was lost when all cannabis was outlawed.
If he thinks little farmers are going to produce enough hemp to displace the paper and cotton industries, again he is wrong. If hemp truly can make these products cheaper than current sources, big business WILL grow their own. And they will do it with the same land raping technology that they use now.
How many people do you know that are currently making their own paper from scratch? How many people do you know that are ginning, spinning, weaving and making their own cloth? How many people do you know that are pressing seeds for oil for daily use? How many people do you know that are savvy enough to even attempt any of those tasks?
The generous answer is: very few. Most people buy those things.
Just because hemp is legalized does not mean that we as a society are going to ever drop our consumer ways.
But once again that is hemp, this story is about pot.
If pot is legalized, and people can smoke it without fear of legal consequence the biggest winners in all of this will be Crispy Creme, Frito-Lay, and Taco Bell. If they can find enough un-stoned employees to keep the stores running.
Finally, I find it ironic and laughable that California, the state with the most restrictive smoking laws in the nation, would seek it's fiscal relief in giving the people something else to smoke.
pot
All these projections ignore the fact that consumer prices for legal pot would not remain the same. They would drop to reflect actual production costs. Otherwise people would just keep 3 plants growing at their house to provide their own supply. Also the large tobacco producers would get in the game: Phillip Morris and RJReynolds producing packs of joints. The profits would find their way to the rich, as they always do.
Legalization
Artemis Gordon was certainly correct in pointing out the possible obstacles to legalization as being the same mega corporate forces that were responsible for the criminalization of pot in the first place. When pot was federally criminalized in 1937, Du Pont had just patented a method for processing synthetic fiber; simultaneously, the corticator that would have made the processing of cannabis fiber exponentially faster, easier, and cheaper had just been invented, and may have been on its way to being patented, thus, Du Pont saw the possible comeback of cannabis as a threat, as did the Hearst newspapers, Kimberly Clark and other corporate forces facing similar competition from pot.
But as Gordon also points out, the cannabis alternatives to paper, chemical substances, fiber, etc. are also lower-to-non-polluting. As history shows, since World War II - roughly about that same time - the Earth has been pumped and polluted with so much toxic substances that we are facing major chemical-originated health problems: cancer, autism, etc, and we all face cataclysmic eco-disaster. Our planet has been literally rendered all but totally toxic! Legalization would go a long way to reversing these trends while there's still time(?).
Finally, the largely illusional allegations of possible health/addiction problems associated with pot have also been largely cooked up - and kept going - by these same corporate forces - and often the race card has been used to further reinforce and intensify the anxieties raised by these allegations. THIS seems at the moment to be the anti-legalization forces' strongest suit. But we can and MUST fight and defeat these forces, for the sake of California's economy, for the sake of our Earth, our collective health, perhaps our national and world economy a swell, and for the sake of our joy and happiness.
A good starting source of information on all the above is Jack Herer's book "The Emperor Wears No Clothes."
Peace!
Legalize Marihuana In CA?
Mr. Segal says that treatment for marihuana would be minimal compare to alchohol. This might be true, but exactly how compassionate is society for people with this "disease" of addiction? Everyone is just SO compassionate until it comes to taxes, God and Republicans stop anyone from adding more "sin" taxes.
As someone who lost the better part of 15 years due to chronic "crazy Miss Greening" I really don't think making marihuana legal is a good idea - that is, unless the California Constitution was amended to provide VERY generous treatment for those addicted to marihuana as a consequence of legalizing it (and for that matter all other drugs).
I'm sure politicians would find a way to rob funds for those addicted anyway, just like the tax on cigarettes to help those who want to quit.
If society wants to maintain a huge prison population due to drug laws and spend so little on rehabiliation there's not much I can do about it.
Legalization
Ok, for everyone out there that is stupid and has no idea POT IS NOT A GATEWAY DRUG!!!!All the money spent on the commercials that try to show pot as a terrible drug are incorrect.I am not worried about a stoner who has the munchies, I am concerned about the meth addict that doesnt have the money for their next hit.They are not like the ones that are addicted to crack, heroin, meth or even alcohol and dont have any money. They are the ones who rob people and commit the crimes that scare me.Pot does absolutely nothing except make you sit and than get the munchies. I know a lot of people that smoke and they dont act anything like that. I say if our government finds a way to make a profit off of selling pot legally than do it. It would cut down on costs for our police to arrest someone for an ounce of marijuana when Beth Ann down the street is cooking meth, but do to the publics opinion Marijuana is just as bad.ITS NOT!!!! STOP BEING SO SIMPLE MINDED AND ALLOW MARIJUANA TO BE LEGAL!!!!!! I would much rather see my tax dollars go to get a meth lab off the block than busting someone with an ounce of pot that is only going to make them lazy and hungry.The person running the meth lab is more likely to rob me and kill me for a drug "fix".THINK PEOPLE!!!! In todays economy all governments could use the extra cash for the state and spend our tax dollars on cops busting actual criminals.
Savings
Another thing to consider is the amount of money it costs not only California, but all states to house prisoners that got busted for pot. Legalize it, tax it, release the pot offenders, clamp down on the hard drugs and this country would save a ton of money and have a lot happier population! I'm 53 and have been smoking for over 30 years and have seen way more problems from alcohol than weed. I haven't grown breasts or seen spiders from Mars. I am a computer tech and a well functioning member of society. I would like nothing more than to see it legalized in my lifetime. This cat and mouse game having to sneak around all the time is getting real old and so am I.
Legalize?
Before you suggest this solution, you need to understand why marijuana is illegal. You clearly don't. Cannabis hemp is a plant that has the potential to bankrupt several different multi-billion dollar industries. If it is legal, people will grow it to make paper. Make paper far cheaper than from trees, and with less environmental damage. There goes a big chunk of forestry. If it is legal, people will grow it for its fiber. Fiber that is much stronger and more long-lasting than cotton, and with less environmental damage. There goes the entire cotton industry. If it is legal, people will grow it to press its seeds for oil. People will grow it to use its seeds for food. There go lots more different crops. Cannabis hemp is much easier to grow than all of these other plants it would replace. It is much harder to maintain a monopoly. Therefore some very very rich people would lose their major source of income. And they aren't about to let that happen. Why do you think the federal government continues to fight so hard against medical marijuana? It's not just the pharmaceutical companies who will lose their ill-gotten gains. Yes, I sound like a conspiracy nut. That is why the marijuana prohibition is so successful. But that is not my point. My point is that in today's political climate, the rich people are never going to allow marijuana to be legalized. Never. Not going to happen. So talking about it is a pointless waste of time.
Income Tax Not the Problem
Segal's suggestion the current deficit is "largely due to its (California) dependence on income taxes, which slide during a recession" is hogwash. While the slide in income tax didn't help, income tax represents some 50% of our state budget. Income tax collections did not fall by two-thirds. (Please see http://www.sacbee.com/740/story/1605963.html for a good discussion of the various taxes and their percentage in the state budget.) The current deficit is the result of several years of California spending more than it collects in taxes, then covering that up with various budgetary tricks. Gary Davis, our previous governor, got the boot for starting some of these shenanigans, but then having the audacity of trying to fix the problem by restoring the vehicle tax to its historic levels. Schwarzenegger came into office into office promising to lower the vehicle tax AND balance the budget legitimately. "Tear up the state's credit card" was how he put it. Some six years latter Arnie has used more tricks and borrowing to not balance an ever-widening budget gap. This is the year the borrowing stopped (no one will lend the state money and it has the lowest credit rating of any state) and their aren't any tricks to mask the problem. The income tax falling didn't help, but even if it had remained constant, the budget would be way out of balance. Laying off ever single state worker, prison guards included, wouldn't balance the budget. The state needs to increase some of its taxes, including property tax (which is held unbelievably low for much of the population).