California Marijuana Dealers Against Legal Pot?


Californians will vote this November on a measure to make legal the growing and buying of marijuana. That would make it the first state in the country to broadly legalize pot. I spoke with Joe Mathews from the New America Foundation about the measure, whether it stands a chance, and who's against it. Here are snippets of our conversation on:

Whether the measure will pass...

"I think it's about 50/50. The polling is about where it need to be -- 60 percent -- before the campaign begins, because people who decide late almost always vote no.

"But you know the money in it is interesting. Prop 13 [which capped property taxes and required a two-thirds majority in Sacramento for future taxes] was a great centralizing force. It made all the control of tax and spending in Sacramento. So this would be devolution because it would allow for local sales taxes and regulation. From a civic government perspective, giving local tax power to localities is great."

Why nobody knows how much the measure would save California...

"A billion was one estimate [if you combine the income from taxes and the money saved in policing and public health enforcement]. Nobody knows the answer to that question. I don't think there's any great data there. California has a strong recent history of making wildly optimistic assumptions about these kind of programs. Most prominently, Schwarzeneggar made a big deal when he came in about expanding Indian gaming to make money, that it would bring in billions. It's raised negligible amounts. 

"In terms of policing, Los Angeles lives with de facto legalization. It doesn't feel like there's a ton of money being spent policing."

Why sin taxes will have to go through initiatives rather than through Sacramento...

"I think there is a greater interest in sin taxes because they're desperate for revenue, and the only way to do it is through the initiative system, where you can win with a simple majority. In the legislature you need two thirds, and all the Republicans have signed on to say let's not raise taxes."

Why marijuana dealers aren't down with legal pot...

Me: At first when I looked at this policy, I assumed that bringing a black market into the light and taxing the product would increase costs for buyers and sellers and keep a lot of market activity underground. But I also read a report that said some marijuana sellers are afraid that legalization will flood the market with supply and drive down prices and potentially profits. What do you think?

"I tend to believe that the second is more true: that the selling of legal pot will bring down costs. I'm somewhat in touch with two of our six local dispensaries, and they believe that legality will reduce the cost of obtaining it. But it think that's based on speculation. Nobody knows. It could be very different. A lot of freedom is given to local governments to tax and regulate. Oakland is very different than Fresno. In classic LA fashion, we don't really regulate or enforce the pot laws. Again, there's not a lot of good data."
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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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