Calif. Tax Officials: Legal Pot Would Bring $1.4B

Source: Yahoo/AP

SAN FRANCISCO – A bill to tax and regulate marijuana in California like alcohol would generate nearly $1.4 billion in revenue for the cash-strapped state, according to an official analysis released Wednesday by tax officials.

The State Board of Equalization report estimates marijuana retail sales would bring $990 million from a $50-per-ounce fee and $392 million in sales taxes.

The bill introduced by San Francisco Democratic Assemblyman Tom Ammiano in February would allow adults 21 and older to legally possess, grow and sell marijuana.

Ammiano has promoted the bill as a way to help bridge the state's $26.3 billion budget shortfall.

"It defies reason to propose closing parks and eliminating vital services for the poor while this potential revenue is available," Ammiano said in a statement.

The way the bill is written, the state could not begin collecting taxes until the federal government legalizes marijuana. A spokesman says Ammiano plans to amend the bill to remove that provision.

The legislation requires all revenue generated by the $50-per-ounce fee to be used for drug education and rehabilitation programs. The state's 9 percent sales tax would be applied to retail sales, while the fee would likely be charged at the wholesale level and built into the retail price.

more: http://news.yahoo.com/s/ap/20090716/ap_on_re_us/us_marijuana_taxes

While $1.4B is a hefty chunk of change, I think cali needs a fair bit more than that.

Plus, I don't think the infrastructure exists for the California legislature to take advantage of legal pot for quite a while. I imagine there will need to be licensing for growers/sellers, some sort of tax audit plan to enforce on growers/sellers/consumers, training for the enforcement of the new regulations, legal battles between companies and employees (no toking up @ work, zero tolerance drug policies, etc...)
I'll bet if the bill passes, it would be another 10 months before the state can capitolize on the measure.

there's another big chunk of cash.

Supply and demand. When alcohol was legalized after prohibition, supply shot up and prices fell 500% nationwide in under a year. And alcohol is a hell of a lot harder to grow than pot.

I've seen estimates claiming that pot could end up as cheap as $5 an ounce, and still have a 50% profit margin at that price, if it were fully legalized and commercially farmed like tobacco.

With all of the taxes we put on tobacco, that product generates about a billion dollars a year in taxes for the state. It's completely unrealistic to believe that Californian's are going to start consuming as much pot as they do tobacco.

it's over $100. for a quarter ounce here now, so an ounce would be $350-$400. - haven't seen $50. ounce since the late 70's.