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Americas

US states considering taxes on cannabis

Latest update : 2009-03-02

Some US states with record budget deficits, such as California, are considering introducing a tax on cannabis, which could bring billions of dollars in tax revenues. But the subject is causing lively debate.

AFP - Amid grim news of record deficits unveiled in the US budget, marijuana advocates are welcoming legislation in US states they say could blossom into billions of dollars in tax revenue.

San Francisco state lawmaker Tom Ammiano introduced a bill last Monday projecting a 14-billion-dollar tax base for the full retail treatment -- buying, selling and growing cannabis.

The leading legalization advocacy group behind Ammiano's bill, Washington-based National Organization for the Reform of Marijuana Laws (NORML), says recession is prompting otherwise skeptical state houses to revisit the ban on marijuana.

Over the last few months NORML has been drafted to work with state lawmakers -- even in conservative locales like Texas -- on budgetary analysis and review how legalization may enable governments fill yawning deficits.

"Cannabis for adult recreation, cannabis for medical use, cannabis as an industrial crop, and (the drug's) related paraphernalia are extremely popular and should be taxed and properly regulated," NORML executive director Allen St. Pierre told AFP. "It's just that simple."

Ammiano's bill used the most conservative estimates from NORML's analysis, he added.

On the west coast, no other cash crop comes close.

At the current consumption rate, California would likely "produce a tax base of up to 20 billion dollars per annum," according to St. Pierre.

Dispensaries in California -- retail outlets throughout the state where medical marijuana patients buy weed -- can take up to 50,000 dollars a day, he said. "This should make your eyes pop wide open if you're a financial commissioner."

But legalization opponent Eric Voth is worried "the number of people who will start using or worsen their habit because of the lack of legal constraints is going to cost the system far more than what might be generated through taxation."

Voth, chairman of the Institute on Global Drug Policy, contends marijuana advocates are "happy to lie to the public" about the gains of their proposals, with an end goal of cannabis legalization "at any cost."

Longtime law enforcement lobbyist John Lovell, who represents the California Police Chiefs' Associations and the California Narcotic Officers Association, also raises questions. Ammiano's bill won't put the illicit marijuana market out of business, won't raise much money and will prompt an exponential growth in usage, he said.

"The last thing we need is yet another lawful product that impairs our ability to use our five senses," he contended, adding: "It makes no public policy sense."

Some 115 million Americans already live in the 13 states where marijuana is decriminalized to some degree.

The state of Alaska and Denver, Colorado, have zero possession penalties for small amounts and "are functional, their people are moral, their children are sane," according to St. Pierre.

Using marijuana should be within the ambit of choices adults can make, he insisted.

In 2005 Harvard economist Jeffrey Miron sent an academic open letter to then president George W. Bush calling for the drug to be legalized.

Miron acknowledges his wake-up call -- "The Budgetary Implications of Marijuana Prohibition" -- may not be considered more seriously in 2009, however, even in the wake of economic collapse.

"But, if you look back at the history of alcohol prohibition, people absolutely did cite the need for tax revenue, at the beginning of the Great Depression, as a main reason to change their minds," St. Pierre said.

NORML highlights how marijuana's production costs amount to almost nothing and that consumers are prepared to pay 300-500 dollars an ounce.

"At the very most, indoors, it can cost some 30 dollars to produce an ounce ... and people are willing to pay 25 dollars for a gram," he said.

"Even if one has strong moral feelings against cannabis, those working on today’s fiscal policy have to be excited about what humans are prepared to pay for dried vegetable matter," said St. Pierre.

Three national polls this year revealed increasing numbers of Americans support legalization, with a Rasmussen survey finding 40 percent support, CBS News finding 41 percent in favor, and a Zogby survey conducted on behalf of NORML showing 44 percent support.

Nate Silver, of leading polling analysis website www.fivethirtyeight.com, says the results, which all break the 40 percent threshold, are significant because every past poll never topped the 36 percent mark.

Twenty years ago the figure was below 20 percent.

"Ghandi said 'First they ignore you, then they mock you, they fight you, and then you win.' Now, with the economic situation, many people aren't ignoring us," marveled St. Pierre. "Funnily enough, they're not mocking us either."

Date created : 2009-03-02

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