$50 per ounce tax on legalized marijuana would benefit state

potBut what about the competition?

A friend of mine on a recent visit to Los Angeles was surprised to see so many medical marijuana dispensaries as I chauffeured her around the city to see the sights. I explained to her the ease of getting documentation from a doctor to purchase pot legally. Living in Pennsylvania, where even buying alcohol is severely restricted compared to CA, needless to say she was amazed. But maybe PA could learn something from CA.

Yesterday, CA’s Board of Equalization said the state could see as much as a $1.4 billion per year increase in revenue, thanks to a bill introduced in the Assembly that would further legalize marijuana and impose on buyers a $50 per ounce tax, in addition to sales tax. With CA in dire financial condition, the tax is seen as  a much needed revenue generator.

Fun facts: Federal authorities consider CA to be the top pot-producing state in the country and say the 8.6 million pounds grown here make it one of our largest agricultural crops.

But a $50 tax on an ounce of pot if CA legalizes it? Won’t this spur buying it outside of legally sanctioned outlets, say via Mexican drug cartels, to avoid the tax? Would it affect prices of illegal pot or lead to competitive pricing?

7 Replies to “$50 per ounce tax on legalized marijuana would benefit state”

  1. I’m partial to Gore Vidal’s essay about legalization – he points out that if you legalize everything and sell it at cost, the violence would go away because the money wouldn’t be there anymore. Interesting point. I’m all for legalization – just list on the packaging EXACTLY what could happen if you take it, including death, and if you’re willing to risk it, buy away.

  2. Yeah and everyone goes searching for booze that has no tax on it to save a few bucks????

    Best thing that could happen would be legalize lots of drugs, put all of the enforcement money into healthcare and then use a lot of the tax revenue to help people with addiction problems.

    Are we smart enough to vote this into law?

  3. $50 tax per ounce is actually quite a reasonable tax. This breaks down to $6.25 per eighth ounce. I’d happily pay that as a tax, and I think a lot of other people would too.

  4. riffic, good point when you break it down like that. with the consistently good grade of pot from dispensaries and elsewhere making it possible to get enjoyment from a much smaller amount, maybe the tax wouldn’t seem so onerous.

  5. @chigirl Interesting that your brought up death as a possible effect of marijuana, because it’s NEVER happened. Check out http://drugwarfacts.org/

    Also..

    Tobacco kills about 400,000
    Alcohol kills about 80,000
    Workplace accidents kill 60,000
    Automobiles kill 40,000
    Cocaine kills about 2,500
    Heroin kills about 2,000
    Aspirin kills about 2,000
    Marijuana kills 0
    There has never been a recorded death due to marijuana at any time in US history.

    All illegal drugs combined kill under 20,000 per year, or a small percent of the number killed by alcohol and tobacco.

    Tobacco kills more people each year than all of the people killed by all of the illegal drugs in the last one hundred years.

    ——————————————————————————–

    From The National Center On Addiction And Substance Abuse at Columbia University.

  6. >>> But a $50 tax on an ounce of pot if CA legalizes it? Won’t this spur buying it outside of legally sanctioned outlets, say via Mexican drug cartels, to avoid the tax? Would it affect prices of illegal pot or lead to competitive pricing? <<

    There’s a certain amount that people are willing to pay as a tax on something, but when you go beyond that price point, you re-empower the black market. Cigarette smuggling is definitely big business these days, more on the east coast, where the tobacco is grown. They are imported into states with high taxes and sold on the black market.

    A “reasonable” tax would raise a ton of money. An unreasonable tax would undermine the whole deal.

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