The California Marijuana Tax Act: or Freedom Through Financial Collapse?

A little late, but as of Monday, California State Assemblyman Tom Ammiano (D-San Francisco) has introduced Assembly Bill 390: The Marijuana Control, Regulation and Education Act, a bill that would decriminalize recreational marijuana use and set up the framework to regulate the sale and taxation of marijuana within California.

Quote:

A Proposed Initiative for the State of California

A tax shall be placed on the sale of marijuana for non-medical purposes in the State of California. For taxation purposes, one-eighth ounce of marijuana shall be considered equivalent to one pint of hard liquor.

Responsibility for collection and administration of the tax shall be placed with the board of Alcoholic Beverage Control. The production, sale, and use of marijuana shall be governed under rules, regulations, and licenses that are equivalent and commensurate with the comparable rules, regulations, and licenses for alcoholic beverages. For purposes of private production and use, marijuana shall be governed under the same rules, regulations, and licenses as those for the private production of wine or brewed beverages. The ABC is directed to formulate and publish such rules, regulations, and licenses within one year of the passage of this initiative.

"Marijuana", as defined in this initiative, shall mean any product made using the cannabis plant that is used or sold as an intoxicant or drug.

Nothing in this initiative shall be construed to diminish any rights or privileges previously allowed to California citizens under Proposition 215.

Additional Details:

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Under the bill, wholesalers of marijuana would pay an initial $5,000 licensing fee with a $2,500 annual renewal fee. Wholesalers are then able to sell marijuana to licensed retailers who would pay a "Marijuana Supplemental Fee" of $50 per ounce of marijuana sold to the public. This fee, officially the Marijuana Supplemental Fee Law, would be used to fund drug education and awareness programs but would not be applied to medical marijuana patients. The proposed bill would also restrict persons under 21 years of age from having "access to marijuana during receiving, processing, packing, storage, and delivery or at any other time," and restricts the consumption of marijuana on the property of wholesalers.

I personally noticed this because it has been getting a lot of national media attention from places like the NYT, CNN, and Fox News (which oddly enough was soft-balling the idea). In addition, the National Organisation for the Reform of Marijuana Laws (NORML) have apparently been asked by several state assemblies, including some unlikely states like Texas, to draft copycat legislation which would be put forward later this year.

I also happen to be in favor of it, if skeptical that it will be passed, as its been a long time coming, and there are only a few potential downsides compared to the current situation. One of these would be the initial spike in the consumption, as estimates place the increase at around 40% in the short term. However, as evidenced by other locations, like everyone's favorite Amsterdam, the long-term growth in consumption would probably not be staggering.

In turn, we would get the major drivers for the bill in the first place, which are increased tax revenue, increased control, and increased visibility into the distribution channels.

In particular, Betty Yee, who chairs the state Board of Equalization, which collects taxes in California, supports the bill as an analysis by the agency concluded the state would collect $1.3 billion a year from tax revenues and the $50-an-ounce levy on retail sales if marijuana were legal. This also represents only the revenue from sales, and would not include the decreased costs and increased revenue from sources like:

Drop in associated crime, liberation of criminals held on related charges, resulting return in prison costs, and increased tourism to the state.

However, there is still a major caveat to this process ,which is that marijuana remains a Schedule 1 Controlled Substance by the federal government of the US. If the federal government does not remove this restriction, or allow California to control the sale / taxation of marijuana within its own borders, then this could create all kinds of issues even if the bill does pass. One of the main ones is that it would create a quagmire for law enforcement which would need to be sorted out. In discussions with the bill's creator, it has been said:

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If the federal ban never is lifted, AB 390 would only prohibit state and local officers from assisting federal agencies in enforcing marijuana laws.

That's sure to go over well. However, as of Friday, new U.S. Attorney General Eric Holder promised a clean break from the policies of the Bush administration regarding marijuana. During a live interview on C-Span, he affirmed that this change includes ending the DEA raids of state-authorized medical marijuana providers.

Quote:

Responding to a reporter’s question regarding the DEA’s recent actions against several California medical cannabis providers, Holder stated: “What the President said during the campaign . . . will be consistent with what we will be doing here in law enforcement. . . What [President Obama] said during the campaign . . . is now American policy.”

Anyhow, thoughts on whether this actually has a chance of passing or is doomed from the start, what overall effect it may have on the legalization of marijuana nationwide, possible international effects, and of course yea/nay.

How ya doing, buddy?

I'd be surprised to see it pass, but if it does, then it's certainly a step in the right direction.

I don't smoke the stuff, but from what I understand, it's no worse than alcohol or cigarettes. Probably somewhat healthier--considering I don't think it damages any organs by constant use?

And people are going to do it anyway, so why not make a legal way for people to do it, and tax the fuck out of it and make the government some cash. As far in debt as CA is, it's certainly a good idea.

The biggest issue they're going to have is getting past all of the preconceived ideas of the masses.

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I had heard earlier this week on the news about how they're planning on beginning to try and tax medical marijuana now that Obama said he's going to reverse Bush's policy of raiding growers.

This thing is sticky, and I don't like it. I don't appreciate it.

Every state should pass shit like this. Without question.

I am a dolphin, do you want me on your body?

It's much easier for the state to monopolize alcohol, tobacco, or even cocaine. As it requires more expertise to produce. On top of the potentially harmful additives the companies could add to the finished product and......

I want my weed organic (and tax-free), man!

Anyway, I'm not sure how this sort of legislation would affect my state. Recreational marijuana use is not illegal, only the commercial distribution. As long as the consumption take's place on your property the police will only hassle you about where (on public land) you picked it from. If anything more kids would get hassled since it would establish strict age-use limits. The only other thing I can think of is it'd reinvigorate the bio-fuel industry as hemp seed can be made into diesel. Considering the whole industrial hemp angle is ignored in this legislation this smacks of desperation. Up with dope, down with hope!

Originally Posted by Araes

That's sure to go over well.

Not really, this is becoming more common. Quite a few municipal/county governments pasted ordinances that guaranteed non-cooperation with the Feds involving local cases or powers invoked by the Patriot Act.

I was speaking idiomatically.