October 28th, 2010 – I dropped in on a marijuana shop here that proudly boasted that it sells “31 flavors.” It also offered a loyalty program. For every 10 purchases of pot — supposedly for medical uses — you get one free packet.

“There are five of these shops within a three-block radius,” explained the proprietor, Edward J. Kim. He brimmed with pride at his inventory and sounded like any small businessman as he complained about onerous government regulation. Like, well, state and federal laws.

But those burdensome regulations are already evaporating in California, where anyone who can fake a headache already can buy pot. Now there’s a significant chance that on Tuesday, California voters will choose to go further and broadly legalize marijuana.

I hope so. Our nearly century-long experiment in banning marijuana has failed as abysmally as Prohibition did, and California may now be pioneering a saner approach. Sure, there are risks if California legalizes pot. But our present drug policy has three catastrophic consequences.

First, it squanders billions of dollars that might be better used for education. California now spends more money on prisons than on higher education. It spends about $216,000 per year on each juvenile detainee, and just $8,000 on each child in the troubled Oakland public school system.

Each year, some 750,000 Americans are arrested for possession of small amounts of marijuana. Is that really the optimal use of our police force?

In contrast, legalizing and taxing marijuana would bring in substantial sums that could be used to pay for schools, libraries or early childhood education. A Harvard economist, Jeffrey A. Miron, calculates that marijuana could generate $8.7 billion in tax revenue each year if legalized nationally, while legalization would also save the same sum annually in enforcement costs.

That’s a $17 billion swing in the nation’s finances — enough to send every 3- and 4-year-old in a poor family to a high-quality preschool. And that’s an investment that would improve education outcomes and reduce crime and drug use in the future — with enough left over to pay for an extensive nationwide campaign to discourage drug use.

The second big problem with the drug war is that it has exacerbated poverty and devastated the family structure of African-Americans. Partly that’s because drug laws are enforced inequitably. Black and Latino men are much more likely than whites to be stopped and searched and, when drugs are found, prosecuted.

Here in Los Angeles, blacks are arrested for marijuana possession at seven times the rate whites are, according to a study by the Drug Policy Alliance, which favors legalization. Yet surveys consistently find that young whites use marijuana at higher rates than young blacks.

Partly because of drug laws, a black man now has a one-in-three chance of serving time in prison at some point in his life, according to the Sentencing Project, a group that seeks reform in the criminal justice system. This makes it more difficult for black men to find jobs, more difficult for black women to find suitable husbands, and less common for black children to grow up in stable families with black male role models. So, sure, drugs have devastated black communities — but the remedy of criminal sentencing has made the situation worse.

The third problem with our drug policy is that it creates crime and empowers gangs. “The only groups that benefit from continuing to keep marijuana illegal are the violent gangs and cartels that control its distribution and reap immense profits from it through the black market,” a group of current and former police officers, judges and prosecutors wrote last month in an open letter to voters in California.

I have no illusions about drugs. One of my childhood friends in Yamhill, Ore., pretty much squandered his life by dabbling with marijuana in ninth grade and then moving on to stronger stuff. And yes, there’s some risk that legalization would make such dabbling more common. But that hasn’t been a significant problem in Portugal, which decriminalized drug use in 2001.

Likewise, medical marijuana laws approved in 1996 have in effect made pot accessible to any adult in California, without any large increase in usage. Special medical clinics abound where for about $45 you can see a doctor who is certain to give you the medical recommendation that you need to buy marijuana. Then you can visit Mr. Kim and choose one of his 31 varieties, topping out at a private “OG” brand that costs $75 for one-eighth of an ounce. “It’s like a fine wine, cured, aged, dried,” he boasted.

Or browse the online offerings. One store advertises: “refer a friend, get free joint.” And the world hasn’t ended.

One advantage of our federal system is that when we have a failed policy, we can grope for improvements by experimenting at the state level. I hope California will lead the way on Tuesday by legalizing marijuana. By NICHOLAS D. KRISTOF. Source.

NEW YORK (CNNMoney.com) — Cash-strapped California would get some relief by legalizing pot, but the biggest boost would be thanks to massive law enforcement cuts, not new tax revenue, experts say.

The state’s marijuana legalization initiative known as Proposition 19 goes to the polls on Nov. 2. And there’s been a lot of talk about taxing it to rescue the state from its budget woes. But even legalization’s top advocates say the drug won’t be a financial cure-all.

“No one’s promising that this is going to solve everything economically,” said Quintin Mecke, spokesman for Assembly Member Tom Ammiano, D-San Francisco, who was the lead sponsor on two earlier efforts to legalize marijuana.

Most of the financial benefit would actually come from budget cuts – which means job cuts — according to a report from the Cato Institute, a libertarian think tank in Washington, D.C. The institute estimates that legalization could add $1.312 billion annually to California’s coffers. But the forecast’s breakdown calls for a savings of $960 million in law enforcement costs and an additional $352 million in tax revenue.

Jeffrey Miron, a senior lecturer at Harvard University and senior fellow at the Cato Institute who co-authored the study, said the majority of the cost savings would be a result of cuts to law enforcement personnel whose services would no longer be required. And axing police officers, prison guards, prosecutors and judges would hurt the job market, at least initially, he said.

That leaves an estimated $352 million in annual tax revenue, a tally that Miron described as “not irrelevant, but not very consequential.” He said it’s a welcome bonus for Californians who prefer legalization regardless, but it’s not enough to sway those who oppose it.

“I think that California is being somewhat optimistic in thinking that this is going to make a significant difference to its budget situation,” said Miron, who supports legalization. “I think it won’t do much for the economy.”

Coming up with a tax revenue forecast for Prop 19 is difficult.

Ammiano’s previous legalization bills, which died in assembly, included a statewide tax of $50 per ounce that would be imposed on producers. Based on that, the State Board of Equalization estimated that California could raise $990 million – in addition to $392 million in sales taxes.

But that estimate isn’t relevant to Prop19, according to Anita Gore, spokeswoman for the board.

Unlike Ammiano’s bills, Prop19 wouldn’t make marijuana legal on a statewide basis. Instead, it would have a patchwork effect, giving local governments the power to allow or prohibit pot sales, and to impose taxes or fees on marijuana sales in addition to a sales tax.

“Any sale would be taxable, so there would be sales taxes collected,” said Gore. “But beyond that, we don’t know how many localities would approve the sale and how many other fees would be added.”

Adding to the complexity, local governments in California that legalize marijuana sales would impose their own tax rate, which varies from one area to the next. In addition, some local governments might impose an excise tax on retailers and producers, while others might not.

“There are too many unknowns to be able to come up with a revenue estimate,” said Gore.

Dale Gieringer, director of the California chapter of the National Organization for the Reform of Marijuana Laws, otherwise known as NORML, has a more optimistic take on potential tax revenue, but even he says it will be a very long time before the state sees any of those funds.

Gieringer said that taxes from medical marijuana total about $100 million annually, and that based on that, Prop 19 could bring in about $500 million in annual sales taxes for the state.

But that’s going to take years to kick in, even if Prop 19 passes in November, he said. Local governments considering legalization will take some time to consider the benefits of additional tax revenue versus the threat of federal lawsuits, since the drug would still be illegal under federal law.

Gieringer added that medical marijuana was legalized in California in 1996, but said it took another eight or nine years to spread across the state.

“I’m assuming that we’re looking at a similar long term phase-in of Prop 19,” he said. “It’s going to be many years, if 19 passes, before it’s going to take effect on the whole state.” Source.