just legalize it already

Calif voters reject legal pot, but cities across the state embrace drug as revenue source

Marcus Wohlson, AP Press, Los Angeles Times

Californians may have rejected legalizing recreational marijuana, but voters across the state are more than ready to reap revenue from the state’s largest cash crop.

On Election Day, all 10 cities with local measures on their ballots approved new or higher taxes on marijuana sales that put the need for cash above the stigma of a federally banned drug. The same was true in Colorado, where medical marijuana was approved in 2000. Nine municipalities approved higher sales taxes on medical marijuana products this year. So far, no Colorado town with a marijuana tax question on the ballots has rejected it.

The embrace of pot as a legitimate revenue stream signals the continued mainstreaming of marijuana in both states, despite the defeat of California’s Proposition 19. Other cities that approved special marijuana taxes, including San Jose, Long Beach and Oakland, have all struggled with recession-driven deficits, and all decided to look to marijuana to bridge the gap.

The decision to tax the drug in a way that resembles special taxes on recreational substances like alcohol and tobacco moves the state even closer to acknowledging openly that marijuana being sold legally under state law is “medical” in name only.

Medical marijuana advocates are frustrated by the comparison to other mood-altering substances. They believe that what they see as the drug’s broad therapeutic properties should put pot in the same category as prescription medications, which are not taxed. They also believe that not granting the drug the respect they think it deserves as medicine has led to crackdowns in other California cities less enthusiastic about embracing marijuana as a revenue source.

In San Jose, some dispensary operators are frustrated by what they see as contradictory messages from city government. On the one hand, the City Council has been working to reach an agreement on regulating as many as 80 pot retailers that have sprung up in the past two years. At the same time, county narcotics officers have led raids on dispensaries that investigators say are using medical marijuana as a pretense to sell drugs.

Yet how much revenue cities will really see from marijuana remains difficult to predict. Dispensaries have always been required to pay state sales tax like any other business, but many would rather risk state penalties for not paying taxes than leave a paper trail for federal authorities.

While the medical marijuana business has made some entrepreneurs wealthy, taxes on the drug are not universally viewed as a salvation for ailing local economies. In Sacramento, officials estimated that taxes on dispensaries would realistically bring in about $500,000 per year. A financial review earlier this year projected deficits topping $50 million annually in coming years.

Marcus Wohlson, AP Press, Los Angeles Times

So the voters do want to legalize marijuana, they just want to tax it properly as well (which Prop 19 failed to do as homeowners would have been able to grow marijuana in 5 by 5 sq. plot of land).

I see, I see. Let’s make notes and get it back on the ballot

Side note: Colorado and Massachusetts are the first two states to imply marijuana legalization measures WILL be on the ballot for the 2012 elections.