States Weigh Tax on Marijuana

By chillinwill · Aug 25, 2009 · ·
  1. chillinwill
    If marijuana was legalized, regulated and taxed, it would likely be distributed in a manor similar to cigarettes.

    This is the third story in a series of occasional, ongoing articles exploring various aspects of illegal drugs and their use in the United States.

    In these tough financial times, states and local municipalities are struggling to find new and creative ways to generate money to close budget gaps.

    In the state of California, some legislators are turning to another kind of green to generate some that can be spent.

    With an estimated $14 billion worth of marijuana being sold in California annually, one state assemblyman sees an opportunity missed and is attempting to smoke out some additional revenue.


    On Feb. 23, first-term legislator Tom Ammiano, D-San Francisco, introduced a bill called the Marijuana Control, Regulation and Education act which would create a regulatory structure similar to that used for beer, wine and liquor, permitting taxed sales to adults while barring sales to or possession by those under 21.

    "With the state in the midst of an historic economic crisis, the move toward 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," Ammiano said in a press release earlier this year. "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."

    Since its introduction, the bill has been shelved, although Ammiano said it will be re-introduced in the next legislative session.

    Even as the bill's future is uncertain, the conversation about legalizing marijuana in order to regulate and tax it is ongoing.


    In 1996, California voters approved Proposition 215 which allowed for medical marijuana to be possessed and used by people with a valid prescription from their doctor. Since then, 12 other states have enacted medical marijuana legislation although specific laws do vary from state-to-state.

    In California however, the medical marijuana dispensaries are regulated and taxed at a rate which varies from place to place. Some citys and towns collect fees from the businesses while others don't, and the businesses are often seen as residing in the shadows, according to Dan Bernath, the assistant director of communications for the Marijuana Policy Project, a Washington-based lobbying firm.

    Oakland voters overwhelmingly approved a measure in July that will increase the tax imposed on the dispensaries from $1.20 per $1,000 in business revenues to $18 per $1,000 under a new cannabis business tax classification, creating an estimated increase of $294,000 in revenue per year.

    "It's not often that you see people coming out to say they want to be taxed, but the dispensaries are eager to pay their fair share," Bernath said. "They've been marginalized in a way and the special tax designation in Oakland finally legitimizes their business."


    In the TV show Weeds, which can be seen on Showtime, a suburban single mother sells marijuana in order to support her two children and pay the mortgage on the home that she and her husband bought before he passed away.

    She attends her youngest son's soccer games and sells bags of marijuana to lawyers, doctors, teachers, city councilmen and others considered society's most respected and influential.

    And despite what some people may believe, that theatrical presentation may not be far from the truth.

    "The truth is that there isn't just one kind of person using marijuana in the U.S. - it's used mostly by people who are otherwise law-abiding citizens," Bernath said. "The preconceptions that people have show the general misunderstanding out there about marijuana and who uses it."

    Bernath cited federal surveys which concluded what many were thinking all along - more people are using marijuana than you might think.

    "Around 15 million people have said they use marijuana every month, 25 million said they use it every year and over 100 million people said they have used it in their lifetime," he said. "That's about 40 percent of the population - not some small group of people."

    And although marijuana use among teenagers is down, according to federal data released over the last few years, the general trend has been a 35-year increase.

    "The fact that 85 percent of teenagers said that marijuana was easier to get than alcohol shows that regulation is a better alternative to prohibition," Bernath said. "Since we started cracking down on asking for I.D. to buy alcohol and cigarettes, the rates of teens using them have declined, and a lot of tax money is being made."

    It has been argued that legalizing marijuana would only drive some users further underground in an attempt to avoid taxation, but Bernath suggests legalization would actually lower marijuana prices - even with a steep tax added on.

    "It is not a hard plant to cultivate but when you are at risk from law enforcement for doing so, it increases the price - resulting in an inflated market," he said. "Legalization would ensure that marijuana is regulated by the government instead of drug dealers, which would mean it has less of a chance of getting to children. And although the tax money wouldn't be the sole solution to the budget woes everywhere, it would begin collecting money that is out of reach at this point."

    By Robert Rizzuto
    August 23, 2009

    Share This Article


  1. gmeziscool2354
    well, this is somethign that swim has been saying for years. he pays a lot of his annual income to his 'dealers' and has thought, what if a novel tax (say 5 percent) was charged on Marijuana. thats an unbelievable amount of money that the government could bring in, plus cutting expenses on sting opperation on small time dealers

    And yes, small time dealers get busted and raided when the local taskforces can't find any big fish.
  2. Lokibee
    There is more than tax money here also..
    You think large companies such as Phillip Morris will NOT put in proccesing and packaging plants so that THEY can get in on the cash? they have the machinery and tech to be able to step right in to the role of distributor. And once one state does it and the big tobbaco companies are making money there they will push for nationwide leaglity so they can make more.
To make a comment simply sign up and become a member!