Can California Smoke Its Way To Prosperity?

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Remember in school when you learned that drugs won't solve all your problems? California must have been under the bleachers that day, smoking some hash. Lawmakers there have introduced a bill that would generate nearly $1.4 billion in revenue by taxing and regulating marijuana in California. Here are some details, via the Associated Press:

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.

I wonder though, how the costs of marijuana legalization would compare to those benefits. I know that tons of pot-lovers will probably complain when I say that marijuana is not completely harmless. Regular use can cause lung cancer, just like cigarettes. Sure, the latter are already legal. But if they weren't, and we were faced with the question of their legalization, I don't think it would be an easy answer.

And what about productivity? A joint-break in the office isn't exactly going to have the same ramifications to productivity as a cigarette-break. Although snack machine profits will certainly soar.

I'm not saying that there wouldn't be fiscal benefits for any state through taxing marijuana. Obviously, there would be. I'd just love to see some honest estimates of the costs involved too. That way, we can accurately evaluate whether those benefits truly outweigh the costs.

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Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.
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