November 23, 2009 – The same day they rejected a gay marriage ballot measure, residents of Maine voted overwhelmingly to allow the sale of medical marijuana over the counter at state-licensed dispensaries.

Later in the month, the American Medical Association reversed a longtime position and urged the federal government to remove marijuana from Schedule One of the Controlled Substances Act, which equates it with heroin and cocaine.

A few days later, advocates for easing marijuana laws left their biannual strategy conference with plans to press ahead on all fronts — state law, ballot measures, and court — in a movement that for the first time in decades appeared to be gaining ground.

“This issue is breaking out in a remarkably rapid way now,” said Ethan Nadelmann, executive director of the Drug Policy Alliance. “Public opinion is changing very, very rapidly.”

The shift is widely described as generational. A Gallup poll in October found 44 percent of Americans favor full legalization of marijuana — a rise of 13 points since 2000. Gallup said that if public support continues growing at a rate of 1 to 2 percent per year, “the majority of Americans could favor legalization of the drug in as little as four years.”

A 53 percent majority already does so in the West, according to the survey. The finding heartens advocates collecting signatures to put the question of legalization before California voters in a 2010 initiative.

At last week’s International Drug Reform Conference, activists gamed specific proposals for taxing and regulating pot along the lines of cigarettes and alcohol, as a bill pending in the California Legislature would do. The measure is not expected to pass, but in urging its serious debate, Gov. Arnold Schwarzenegger (R) gave credence to a potential revenue source that the state’s tax chief said could raise $1.3 billion in the recession, which advocates describe as a boon.

There were also tips on lobbying state legislatures, where measures decriminalizing possession of small amounts have passed in 14 states. Activists predict half of states will have laws allowing possession for medical purposes in the near future.

Interest in medical marijuana and easing other marijuana laws picked up markedly about 18 months ago, but advocates say the biggest surge came with the election of Barack Obama, the third straight president to acknowledge having smoked marijuana, and the first to regard it with anything like nonchalance.

“As a kid, I inhaled,” Barack Obama famously said on the campaign. “That was the whole point.”

In office, Obama made good on a promise to halt federal prosecutions of medical marijuana use where permitted by state law. That has recalibrated the federal attitude, which had been consistently hostile to marijuana since the early 1970s, when President Richard Nixon cast aside the recommendations of a presidential commission arguing against lumping pot with hard drugs.

Allen St. Pierre, the executive director of the National Organization for the Reform of Marijuana Laws, said he was astonished recently to be invited to contribute thoughts to the Office of National Drug Control Policy. Obama’s drug czar, Gil Kerlikowske, was police chief in Seattle, where voters officially made enforcement of marijuana laws the lowest priority.

“I’ve been thrown out of the ONDCP many times,” St. Pierre said. “Never invited to actually participate.”

Anti-drug advocates counter with surveys showing high school students nationwide already are more likely to smoke marijuana than tobacco — and that the five states with the highest rate of adolescent pot use permit medical marijuana.

“We are in the prevention business,” said Arthur Dean, chairman of the Community Anti-Drug Coalitions of America. “Kids are getting the message tobacco’s harmful, and they’re not getting the message marijuana is.”

In Los Angeles, city officials are dealing with elements of public backlash after more than 1,000 medical marijuana dispensaries opened, some employing in-house physicians to dispense legal permission to virtually all comers. The boom town atmosphere brought complaints from some neighbors, but little of the crime associated with underground drug-dealing.

Advocates cite the latter as evidence that, as with alcohol, violence associated with the marijuana trade flows from its prohibition.

“Seriously,” said Bruce Merkin, communications director for the Marijuana Policy Project, an advocacy group based in the District, “there is a reason you don’t have Mexican beer cartels planting fields of hops in the California forests.”

But the controversy over the dispensaries also has put pressure on advocates who specifically champion access for ailing patients, not just those who champion easing marijuana laws.

“I don’t want to say we keep arm’s length from the other groups. You end up with all of us in the same room,” said Joe Elford, counsel for Americans for Safe Access, which has led the court battle for medical marijuana and is squaring off with the Los Angeles City Council. “It’s a very broad-based movement.”
By Karl Vick. Source.

July 30, 2009 – California voters may soon get a chance to weigh in on whether marijuana should be legalized and taxed by the state. If enacted, this may help the state’s budget by providing revenue from a brand new source, while also freeing up money that previously went to enforcement efforts against marijuana growing. Of course, marijuana would still be illegal under federal law, but this may be a turning point in the legalization movement — the point where politicians desperate for tax revenues see dollar signs instead of prison bars when looking at the cannabis plant.

And make no mistake — this is not medical marijuana we are talking about. From the wire service report:

A proposed ballot measure filed with the California attorney general’s office would allow adults 21 and over to possess up to an ounce of pot. Homeowners could grow marijuana for personal use on garden plots up to 25 square feet.

Now, 25 square feet sounds like a lot, but it’s really only a plot five feet by five feet. Assumably, this was written into the ballot measure so marijuana (at least initially) wouldn’t be sown by agribusinesses in 1,000-acre fields. But even with the land-use restriction, the initiative is remarkable for the lack of other restrictions. No mention is made of “medical” or “medicine” or any of that — just “adults.”

There are even two ballot measures to choose from. The second one is even less restrictive:

The Tax, Regulate and Control Cannabis Act of 2010 would set no specific limits on the amount of pot adults could possess or grow for personal use. The measure would repeal all local and state marijuana laws and clear the criminal record of anyone convicted of a pot-related offense.

Bet that would save a few dollars on prisons. And even if these ballot measures fail, state legislators are introducing bills to do exactly the same thing. So, while it should not in any way be seen as inevitable, it now appears possible that California may soon legalize and tax marijuana, used for recreational purposes.

While the concept of taxing marijuana is a new one for most people to consider, it actually has a long history. The very first federal law dealing with (pun intended) marijuana was the Marihuana Tax Act of 1937. Earlier laws outlawing “narcotics” had left out marijuana (or, in the spelling more common at the time, “marihuana”), so this was a more specific law dealing only with cannabis (and hemp). It ostensibly levied a tax on marijuana, which was widely used in medical products of the day. The tax was pretty low (the base rate for a doctor was one dollar for a tax stamp, per year), but the penalties for not paying the tax were the real purpose of the law. The law did not make marijuana illegal, so what the feds would clap you in prison for was not ponying up the tax. This had to be softened during World War II, when hemp was necessary for military supplies (hemp ropes, before nylon became widespread) and the planting of hemp was actually encouraged by the federal government (as in the “Hemp for Victory” movie put out by the feds in 1942).

Later, in the 1950s, marijuana was flat-out made illegal at the federal level. And then, at the beginning of the 1970s, the Controlled Substances Act codified all illegal drugs, and superceded the 1937 Marihuana Tax Act.

But taxing illegal drugs, including marijuana, didn’t end there. The next iteration of taxing marijuana came as a result of individual states being annoyed at the federal government. I believe the first of these was Arizona, which (in the late 1970s and early 1980s) had to watch as the feds made a lot of money off the drug traffickers moving through their (border) state. In the 1980s, the big weapon used in the Drug War was property confiscation. So the federal Drug Enforcement Agency (DEA) would catch a semi truck full of bales of weed on an Arizona highway, and they would impound the truck. Later, they’d sell the truck in a government auction, and the DEA got to keep the money. Arizona was annoyed at being cut out of the profits, so they instituted a state tax on marijuana and other illegal drugs. This way, when the semi was auctioned, they could claim “unpaid taxes” on the cargo, and get their cut of the money raised. Many other states followed suit, and passed their own drug taxes for the same purpose — forcing the feds to share the spoils. They all sold (and some still sell) drug tax stamps for this purpose (Nebraska’s stamp unquestionably has the most creative design).

So, once again, the purpose of the tax was disingenuous. The states had no interest in making drugs legal, they just wanted a cut from any busts the feds made in their state. But now, for the first time, California seems to be seriously considering both legalization and taxation simultaneously — in other words, they are interested in the tax revenues themselves, rather than a back-door method of gaining windfall taxes from federal busts.

But I would caution the state lawmakers — and the people advocating for the new laws — to be conservative in estimating the revenue gained from these taxes. This is a by-product of the 100-year history of the Drug War itself. When you read in a newspaper that “$6 million worth of drugs captured” this dollar amount is often vastly overstated. And, even taking such estimates seriously, there’s a factor that most people don’t even take into consideration, which shouldn’t be ignored.

Say you want to estimate how much money California would make off a new marijuana tax. You come up with an estimate of how much pot is sold in the state (let’s call it $100 million, just for argument’s sake — since I have no idea what the actual figure is). You then estimate how much the market will grow, due to it now being legal. But then you’ve got to subtract anyone who grows their own at home, since they won’t be selling it to anyone (the tax is usually levied on point of sale, but I guess if it was a production tax they’d theoretically tax peoples’ back gardens as well). Finally, you come up with a figure.

But the big factor most people will miss is that the price of something which was previously illegal will go down if it is made legal. The price of moonshine during Prohibition was about ten times what hard alcohol sold for afterwards. Meaning, overnight, that “$100 million” market becomes “$10 million.” When something is illegal, most of the price is for the risk involved in producing it and getting it to the customer. Remove the risk, the price always drops. Always. Especially if a law passes without a “25 square foot” restriction, because then farmers out in California’s Central Valley will start growing massive amounts of marijuana (and as every economist knows, when the supply goes up, the price goes down).

So California should be careful when estimating what effect a (legal) marijuana tax would have on the state’s coffers. An easy way to avoid some of this problem would be to design the tax on “weight” rather than as a sales tax (percent of purchase price, in other words). Then the projections for anticipated revenue might be a little easier to make, because the price per ounce to the customer wouldn’t really matter, as the state would be guaranteed a certain dollar amount no matter how low it went.

A recent poll showed that 56% of California voters already approve of the concept of legalizing and taxing marijuana for personal, recreational use. Meaning that a ballot initiative has a fairly good chance of passing. I would just caution everyone to be realistic when making estimates as to how much tax revenue would be raised by doing so. California has such massive budget problems right now that a marijuana tax certainly couldn’t hurt the state’s cash flow. And, with the voters apparently ready to approve such a scheme, it looks entirely possible that it could happen. But overestimating the revenues expected could actually undermine the case for doing so. The advocates for legalization and taxation should be careful when drawing up their estimates, and keep their promises of tax revenue realistic, to better convince voters of the practicality of the idea. By Chris Weigant. Source.