Marijuana to the Rescue: 'World News' Touts Pot as California's Magic Fix

As it becomes clearer that California state government is unable to maintain the lavish social service structure it developed when the economy was in better shape, calls for the elixir of legalized marijuana are growing louder and louder.

And with these calls have come more and more media reports explaining how legalization is gaining traction in the California state legislature.

“And in California, where officials are struggling to close a $26-billion budget gap, there is a radical proposal on the table legalizing marijuana,” “World News” anchor Dan Harris said on his July 12 broadcast.

“What they’re saying,” explained ABC correspondent Brian Rooney, “is that California could ease its budget crisis by relaxing with a little legal weed.”

The Marijuana Public Policy Project [1], an organization touting the legal sale of recreational pot as a revenue creator, is running TV spots in California. Bruce Mirken, the organization’s director of communications told ABC it didn’t make sense not to legalize the drug.

“What we have with prohibition is the worst of all possible worlds,” Mirken said. “A drug that’s as common as dirt and totally unregulated and totally untaxed. It makes no sense.”

Estimates vary on how much legalization would bring in, but Rooney reported it could bring in $50 an ounce in tax revenue.

“Proponents of legalization predict a tax windfall,” he said. “It takes about three months to grow marijuana and one high quality plant can produce two ounces with a retail value of about $800, which under the proposed law would give the state a $100 hit.”

But Rooney’s segment ignored the enormous black market that already exists for the drug – a market that wouldn’t necessarily go away with legalization. As Harvard economist and legalization proponent Jeffrey Miron pointed out for Slate.com on June 10 [2], pot smokers may not be interested in paying the taxes levied on legal, regulated weed just for the ability to smoke it legally. If they continue to go to the black market to avoid these taxes, there will be no windfall as advertised.

Even California State Rep. Tom Ammiano of San Francisco, the backer of the legislation [3], doesn’t foresee it having much real impact on the states’ $26 billion deficit. “Well, the income from tax is a sales tax, an excise tax that would be in the neighborhood of $1.5 billion,” Ammiano said. “The amount of the money that would be saved in terms of incarceration and the not enforcing of minor marijuana crimes I imagine would be another few million, if not more.”

This sounds simple enough, but still doesn’t address the out-of-control California spending problems. Nonetheless, Ammiano isn’t accounting for the cost of other measures that would have to be put in place to enforce the revenue collection from legalization and the means combat the expansive black market. Furthermore, legalization would cause the price of marijuana it to plummet, making it not as lucrative a cash crop as it is currently, as Jeremy Singer-Vine explained in the Slate article [2].

“A few reform advocates have tried to crunch the numbers. Dale Gieringer, who coordinates NORML’s California branch, estimated in 1994 that free-market, untaxed pot would cost just 5 cents to 10 cents per joint [4], a potency-constant measure. Even adjusted for inflation, that's still at least 100 times cheaper than today's marijuana prices, according to Gieringer.”