California's Prop 19: The First Step Toward a National Marijuana Industry?

Will California's Proposition 19 get passed or go up in smoke? If approved, the controversial ballot measure would legalize most marijuana-related activities in the state for people age 21 and over, reversing decades of prohibition. Prop 19 is being closely scrutinized by media pundits, academics and historians, and U.S. government officials are promising to continue to enforce the federal Controlled Substances Act in California and elsewhere. The measure is also raising questions about the financial aspects of any future, legal marijuana industry in the U.S.

Advocates of Prop 19 say it could bring billions of dollars into financially strapped California. The state's branch of NORML (National Organization for the Reform of Marijuana Laws) estimates a legal marijuana market there -- beyond the current medical marijuana dispensaries -- would bring in at least $1.2 billion in tax revenues. All that marijuana, it says, would increase employment. State pot sales could also be "on the order of $3 billion to $5 billion, with total economic impact of $1 billion to $18 billion including spin-off industries such as coffeehouses, tourism, plus industrial hemp."

A Revenue Producer or a Legal Quagmire?

Prop 19 supporters also say it would save California over $200 million in law enforcement costs. " Legalization will move the marijuana industry above ground, just as the repeal of alcohol prohibition restored the legal alcohol industry," wrote Jeffrey Miron, a senior fellow at the Cato Institute, earlier this year. "A small component of the marijuana market might remain illicit -- moonshine marijuana rather than moonshine whiskey -- but if regulation and taxation are moderate, most producers and consumers will choose the legal sector, as they did with alcohol."

"I think the dollar impact can be huge," says Mac Clouse, a professor at the University of Denver's Daniels College of Business. He believes legalizing and controlling marijuana, using the sale of alcohol as a guideline, could turn pot into "a major revenue-producer for the state."

But Clouse and other observers still have their doubts about Prop 19. The measure also calls for municipal governments to enforce and control marijuana revenue and fees -- a fact that would make marijuana "sin taxes" in California not only unique, but, according to Prop19's critics, uniquely unwieldy.

"Proposition 19 was drafted by activists and pollsters rather than by people who know the laws involved," Mark Kleiman, a professor of public policy at the UCLA School of Public Affairs, recently told LA Weekly. "Proposition 19 can't tax marijuana. It says that every locality has to decide, so localities will compete with each other to get the lowest taxes. It's a race to the bottom."

"Proposition 19 is probably not well thought out enough," says Clouse. "It's a big enough thing to [not regulate] on a local basis. If you do it on a local basis, you still keep some of the problems we have, with unequal enforcement."

Outright opponents of the measure say it could have severe, unintended consequences for business in California. One anti-Prop 19 group warns that employers would be unable to enforce federal drug-free workplace regulations, while facing new obstacles during attempts to discipline employees believed under the influence. "If passed," the group says on its website, "Proposition 19 promises to be a legal quagmire for California businesses, raising significant liability issues."

Clouse believes Proposition 19, if passed, could be a big step toward the national legalization of marijuana -- while simultaneously raising many new questions. For example, he says, "If it's legal in some other state outside of California, could you then legally import it from, say, Michigan? What about imports internationally? This begs the issue to look at it from a national and international viewpoint."

Increase your money and finance knowledge from home

How to Avoid Financial Scams

Avoid getting duped by financial scams.

View Course »

Economics 101

Intro to economics. But fun.

View Course »

Add a Comment

*0 / 3000 Character Maximum

359 Comments

Filter by:
hawks1965

I am 110% for the legalization of pot in every state. I am 64 years old but I can see as everyone else does that we have to have more tax revenues from somewhere.
It could be a multi-billion dollar industry. I say legalize it, regulate it and make strict laws on its useage. I have tried it many years ago but it is not for me. But I am against other hard drugs, cocaine, meth and so on. Many people think that if pot is legalized, that a lot of people will turn into drug addicts overnight, what a joke that is. It will not lead to other hard drugs uses as alcohol does not now do. When we legalized alcohol sales here in 84 a lot of people thought that some people would turn into alcoholics overnight. Just the preachers and boot leggers were against it.

Dennis

December 24 2010 at 12:38 AM Report abuse rate up rate down Reply
oredrag

It doesn't take a genius to figure out that legalizing marijuana would reduce drug related crimes in America today! Or do we so easily forget that after prohibition alcohol related crimes dropped astronomically? WOW! Go figure! But then the Rich and Elite backed by the GOP just couldn't allow this to happen could they? They saw that when the American people had a choice, they would do the right thing and not let the Rich and Elite herd us like cattle. Marjuana, just like Alcohol is a CHOICE that our people can simply use or NOT use which destroys all the major crime waves associated with it, when it's legalized!

November 28 2010 at 9:35 AM Report abuse +2 rate up rate down Reply
Fred

Why is this article still posted?

November 26 2010 at 12:08 PM Report abuse +2 rate up rate down Reply
Buckingham's

IF it is legalized in California, maybe the FIRST place they should start selling it is in.....WEED, California!

November 21 2010 at 1:50 AM Report abuse +2 rate up rate down Reply
Missie

I must say, I am a supporter of Prop 19. I don't know if people understand exactly what the passing of it could mean, not to just California but to the entire country. The first and foremost way would be employment. There will have to be "pot" farmers, processors, packaging and sells. This state needs gainful employment. Second, would be much needed taxes. Third, would help empty a very overcrowded prison population. If pot growth and sells are legal we will not have to put so many in prison. Fourth, it would free time for the local and state officals to go after "real" drugs, such as meth, heroin, etc. As people that sell to minors would be able to go to jail and or prison. It helps protect our children from real drug dealers. If governed by the same rules and regulations as alcohol, how can the state miss.

November 18 2010 at 2:33 PM Report abuse rate up rate down Reply
1 reply to Missie's comment
DonRP

THE COST OF FOOD WOULD SKYROCKET!

November 29 2010 at 2:09 PM Report abuse rate up rate down Reply
calderon637

I hope we can legalize it. I thought we were gonna win the elect, and legalize the best drug in the in the world (Marijuana, Weed,Dank). But we didnt do it. So Im glad we still have a chance to win sometime, and get high.

November 17 2010 at 8:38 PM Report abuse -1 rate up rate down Reply
mmmk

Its only a matter of time before legalization. Its a civil rights issue.

November 10 2010 at 8:09 PM Report abuse -2 rate up rate down Reply
1 reply to mmmk's comment
DonRP

KOWIFORNIA IS A VIOLATION OF MY CIVIL RIGHTS.

November 29 2010 at 2:12 PM Report abuse rate up rate down Reply
parlenic

All I heard is from this story is "lets legalise it so we can pay off debt". But first we have to figure out how to control the monopoly so not any Joe blow can bring it over or sell it. How is that legalising pot? To me it sounds like they are only legalising pot so they can get tax dollars out of it. And until they can find a way to capitalise the politicians will have 1000 other reasons to brainwash society as to why to vote no on prop 19. To me. The legalisation of pot means that if you want to grow it in your own back kitchen window its ok. Just as if you want to make beer at home you can. The problem is that most beer kits can cost ten to 50 dollars just for a small amount where as a pot plat is seed soil and water. Could cost nothing if you do it at home. That is what these politicians have to figure out before they make it legal is how can they permit anyone from making it for free. And to only let people buy it from taxed outlets. This is what will happen. The market will be controlled by the pharmaceutical markets and any other federally approved store to sell it. What they distribute is what they want back before new product will be brought in. It will be well documented and growing at home will still be illegal. As well as selling it without the proper license. Like an alcohol license. So it will basically still not be legal. Only legal for the gov. to waste more money and turn this nation even further into the biggest melting pot ever. See full article from DailyFinance: http://srph.it/bOEMf2

November 09 2010 at 12:36 PM Report abuse rate up rate down Reply
macrofolks

I think the american govt should raise marijuana, opium, coca and every other drug and charge almost nothing for it but also make sure that a prescription is written for it and hold every physician completely accountable for his presciptions. that will cut the soul and profit out of the drug industry forever. it will end the taliban. it will end drug trafficking. and it will make drugs controlled and licensed very stringently. its time to stop fooling around with this. I hate drugs for sure, but it should be made availible to kill off organized crime. legalize prostition as well. why not? but control it. make it availible only to consenting married couples.

November 08 2010 at 7:10 PM Report abuse +1 rate up rate down Reply
ddemko2177

http://www.pihg.net/Industrial_Hemp_FAQ.php Industrial hemp has very little THC. The reason it was outlawed was to make way for Petroleum By-Products. ‘Reefer Madness’ was developed by the Rockefeller's 'Media Mind Control System‘. Everything you eat, drink, wear, drive and take shelter in revolves around the Petroleum Industry.

November 08 2010 at 4:52 PM Report abuse -1 rate up rate down Reply
1 reply to ddemko2177's comment
aferditaa

tax the church if you want to fix debt! after all pot is much more fun then church

November 27 2010 at 10:31 AM Report abuse +1 rate up rate down Reply