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Prop. 19 approval could decrease marijuana costs, increase consumption, report says


The cost of marijuana would drop as much as 80% and consumption would rise if Californians vote for Proposition 19, the legalization measure on the November ballot, researchers at Rand’s Drug Policy Research Center have concluded in a detailed analysis of the issue.

The Santa Monica-based, nonprofit research institute predicted the cost of marijuana, which runs between $300 and $450 per ounce, could plunge to about $38 by eliminating the expense of compensating suppliers for the challenges of operating in the black market.

The researchers were not certain how much that decline in price might spur use, but noted that one typical estimate is that a 10% drop in price increases use by about 3%. Other factors, such as the elimination of legal risks, could also increase usage between 5% and 50%.

The report noted that it was impossible to predict tax revenues from the initiative, which leaves that decision up to individual cities and counties. Based on a statewide $50 per ounce tax proposed in a legalization bill introduced by Sen. Tom Ammiano (D-San Francisco), the report said state tax revenues could range from $650 million to $1.49 billion.

“California voters and legislators face considerable uncertainty because it is very difficult to estimate how much more marijuana will be consumed in the state or how the change will affect tax revenues, criminal-justice costs and healthcare costs,” the study concludes. The 54-page report, with 14 pages of footnotes, is called “Altered State?” and was paid for by Rand.

The researchers noted that projections for marijuana use and tax revenues hinge on estimates of use, prices, how use changes with price, taxes imposed and evaded, and numerous other factors. The report is peppered with caveats about the assumptions researchers had to make.

To calculate the price drop, researchers looked at the cost of growing marijuana in a 1,500-square-foot house. The researchers concluded that the wages paid to employees who tend the crop would slip from as much as $25 per hour to no more than $10, just a little above what nursery laborers earn. They also suggested growers would have easier access to labor-saving automation, savings from growing on a larger scale and minimal risk of arrest and forfeiture.

If the per-ounce cost dropped to $38 and the Ammiano bill’s $50 per ounce excise tax passed, taxes would account for more than half the cost of the state’s marijuana, an observation likely to inflame marijuana idealists who see it as a natural weed that ought to be treated like an herb.

The report notes that Ammiano’s proposed tax is about 10 times the rate of state tobacco taxes. That high tax creates an incentive for tax evasion that is more financially rewarding than smuggling marijuana from Mexico to California and it could also encourage smokers to turn to the highest-potency marijuana to get more bang for their buck, the researchers concluded.

Researchers also looked at the estimates of the cost of enforcing marijuana laws in California, which ranged from $200 million to $1.9 billion, and put it at “probably less than $300 million.” They also conclude that it is not possible to determine whether increased use would lead to more drugged driving accidents and to more use of harder drugs, such as cocaine, saying the research is inconclusive.

-- John Hoeffel

Photo: L.A. Times file

Comments () | Archives (186)

They key word in this article is "could". We can sit here and what if everything to death, but a finding good "what if" reasons is no good reason to not allow something cause its just a "what if". As for the prices going down and usage going up I don't believe that one. It may increase a bit but 5% to 50% I'd like to meet the people who came up with that figure. Look at other countries where all drugs are legal. The usage is actually lower than the US per capita. If someone whats to get high and is of legal age I don't see why not as long as the follow the laws. Its a victim less "crime". We allow mass amounts of "booze" to be consumed in the US why not pot its much safer in my eyes. I have never seen nor met someone who has seen a fight after smoking, domestic violence after smoking or really any horrific crime. Now I'm not saying that it does not happen but if you check the numbers there will be much less crimes/arrests committed while on pot. I mean you can flip on cops anytime and see 2-3 people getting arrested for something to do with "booze" in a half hour show. I don't know, I can see why people might be scared and worried for their kids but trust me you kids more than likely will smoke pot. Would you want them to get arrested for a victim less "crime" I would not want my kid smoking pot at a young age. Everyone I guess thinks its the devils plant or something. Maybe we should make hops and barley illegal too. Considering those ingredients can be put together and make beer. Over 11,000 people died as a result in 2009 can someone tell me how many died cause of pot if there is even such a record kept being as it will be so small compared. It doesn't make sense to me why pot is illegal. Whats the worst that could happen? More people buying junk food? Well good article, keep up the reporting. Can't wait to see where this goes this November. Yes on 19!

Prop 19 will keep growers out of jail. This is a chance for the Cannabis Industry To Show how Cannabis over the Counter Sales can reduce harm.Time for Cannabis to Help pay for assistance with Social Issues .Imagine Cannabis Supporting Helping SSI REcipients to Become Independent.The Drain on The Systems Coffers is Too Much.Cannabis can help ease SOME of the Burden.Imagine Two Non Profits.One Selling Cannabis Over The Counter and Giving Twenty Percent off The Top to The Other Non Profit.Both will be eligible for matching Foundation Grants. That is what we want to Do.THANKS Richard Lee. The Oaksterdam PLayers Who are Sponsoring This are Quite Ethical.I Have Seen The Dark Side and Prop 19 is Going To Prevent That from Happening.The City will Have control.AWESOME.

The Cost of Growing The Best will never drop that much but OUTDOOR Herb will.The Cost of Electricity and Nutrients are quite HIGH.The 38 dollar Ounce of Outdoor may be Possible Who Knows? Any Way you Look at it this will be Better than the Staus Quo.The Most Shortsighted Fact is The 18 to 21 year Old Black Market.Can anyone say Amendment??I Have Lived The Hell of a Medical Cannabis Cultivation Conviction, just to Win My Appeal.What a waste of Solano County Resources. This is a Great Start that Even Consevatives will Like IF THEY READ THE PROPOSITION.

legalize it!!!!!!!!!!!!!!!!!!!!

If the price of cigarettes was to drop to 1 cent per pack, I still wouldn't want to smoke them. Reducing the price of marijuana may increase consumption a bit but I don't think by very much. Even if it did, the good that would come from ending prohibition far outweighs the negatives of a few more people enjoying a natural legal high. In my case, I do like marijuana very much. But, because it's illegal, I often end up drinking as an alternate for my relaxation and enjoyment. Marijuana is safer and a healthier alternative to that.

The goal is to de-criminalize the use of marijuana, right?

The RAND study had big problems with it though. Prop 19 Myths goes into more detail about this...

Rand Study Should Not Be Taken as Gospel:

Don't use it, probably never will but 19 will lower the cost for awhile, if low enough...keep the Mexican pack rats in Mexico.

But like cigarettes & booze, if the government has something to tax it will. Give it time, the illegals will be back carrying weed North because Mexican weed will be cheaper than the overtaxed legal weed in 10 years.

Legalizing marijuana will not make it a 'gateway' drug. By now being able to buy it legally, the black market dealer will now be cut out of the equation and isolated. Not to mention drug task forces can focus solely on dealers of harder drugs.

How much will the state get in tax revenue from this? No one really knows for sure, but it will be more than they have now which is a plus. Will the heroin addicts & meth & crackheads switch to pot? Doubt it. The black market if you will, for these drugs will still exist. Maybe this will free up some law enforcement assets to go after the gangbangers so people can have their neighborhoods back. This might take a little money out of their pockets until they figure out another way to make up the difference.How they do this might make the situation worse. The only way to hurt them is to go after their sources of income ie.. Illegal drugs, prostitution, Illegal (notice I said Illegal) firearms and other various nefarious activities. I myself don't use it, but if it provides a legitimate use for people such as chemo patients and maybe mellow out some violence prone individuals then so be it. What consenting adults do in the privacy of their own home is their own business AS LONG AS IT DOES NOT INFRINGE ON THE RIGHTS OF OTHERS.

I doubt that there will be any real increase in pot smoking. I know a ton of people that won't smoke it just because it's legal. I know I don't drink and alcohol is legal. This story was slanted one way and no way balanced.

"I dont smoke pot but I am sick of paying tax money to put people in jail and enforce this useless ineffective war on drugs. It it time for a different approach (generate revenues, and redirect existing enforcement dollars into treatment)"

That's because you don't live next door to drug addicts. I do. I'd love nothing more than to see them out of my neighborhood, and in jail. Drug addicts attract other low life drug addicts, and bring with it noise disturbances, vandalism, burglary, public exposure, public urination, public intoxication, littering, drug dealing...every low life activity known to man. People who want to legalize drugs don't care about good, hard working citizens, who end up with this addict trash in their neighborhoods.

Oh, and by the way, you ARE paying for them now. They don't work, and live off the public trough. In fact, you're paying for their drugs. They don't want any part of your treatment idea either. They like things just the way they are.

You have GOT to be JOKING!! Just how does this report quantify it's results of pot going to a price of $38 per ounce when there will be (if Prop 19 passes) a $50 per ounce TAX from the state?? Not to mention all the LOCAL communities that will tack on their own tax of $10-$50 an ounce as well!

The toughest fight (and biggest money) AGAINST the legalization is not going to come from Republicans or non-users, but from the current GROWERS and CARTELs that stand to lose hundreds of millions of dollars each year selling it illegally!!

Yes, the price will go way down at the WHOLESALE level, possibly to around $50-$100 per ounce, but guess what... It's already selling 'wholesale' (meaning quantities in the pounds) for about $200 an ounce and NO taxes are being paid or collected on the mega millions/billions spent on pot...

Besides, if pot becomes legal here in CA, several other states will follow suit and pretty soon those poor illegals carrying those 50-75 pound bundles across the border won't have much incentive for coming here anymore! The killings will lessen and the gangs that sell pot won't have as much money to spend on guns either... what a shame...

just watch and see how much money gets spent AGAINST this... Then think about where that money is coming from... No, not from mom or dad... It's coming from the growers and importers...

the state will rot more then it already has if marijuana is legalized!!! junkie bastards move to amsterdam if u want to be high all the time

In Prop. 19 is your estimation including revenue from clothes, oils, food, building material, paper products, and of course medicine. All which is easily made from cannabis. Why not put it all on the line. Let all who live in this wonderful land understand the true greatness of this plant. Smoking weed is only a small part of the plant, don't forget to mention all the other benifits. When I think of all the revenue that could come from the sale of cannabis it blows my mind.
Let me tell you why the government doesn't want it to be legal. We would have plenty of food, (wouldn't have children going hungry), we could make our own gas, and don't forget we would NEVER have to cut another tree down. The list goes on and on. Please read and study all we can gain from allowing cannabis to be grown legally in the USA. AMERICA CAN BE GREEN AGAIN! Pass the word.

Trust the greedmasters to try to steal everything before it's even legal.

Taxes only ever fuel more taxes, when the incompetent realize they can make money by stealing via taxes there is never a end to it.

okay - but be careful what you wish for! An oz of pot drops to $38 bucks and a box of fruitloops skyrockets to $17.50!

if legalization occurs, we should expect crime to lower as well. when portugal legalized illicit drugs they had a drop in crime, a drop in illicit drug use of both teens and adults as well an increase in illicit drug users seeking rehabilitation ( which was offered to them instead of criminal penalties )..

The research regarding marijuana being a gateway drug and leading to the use of "harder" drugs is not at all inconclusive. That nonsense was rolled out during the Reagan years and was long since debunked.

Because marijuana is illegal, people need to go to a dealer to get it. Those dealers usually also sell other drugs, like cocaine and methamphetamine. Since the dealer is a businessman, he of course exposes his pot customers to those other drugs and does his level best to get them to buy some. Free samples, etc. Cocaine, heroin and meth are all addictive, marijuana is not, thus it is a best business practice to get the user hooked on the addictive and expensive drugs, and steered away from the cheaper, non-addictive one.

It is therefore BECAUSE pot is illegal, that it is a gateway drug. If you could buy pot at a pharmacy or legally grow your own, you would not have to go to that dealer to get your stash, not be exposed to those harder drugs, and thus probably not start to use them.

It's not rocket science, just common sense. Once you apply common sense to the commonly held beliefs that prop up the "war on drugs", most all of those beliefs crumble.

leagilazation is the best thing we could do for california, it will help so much

We need to take the profits out of the drug cartels pockets and into our own. The taxes would help our dabilitated state immensely. As a parent it is still my responsibility to teach my children the dangers of marijuana use which I feel are far less worse than the health consequences of alcohol or tobacco.

Shoot - $88 for an ounce of quality bud? I don't think that is worth complaining about - especially if it is just to tide you over till your personal crop matures!

Looking forward to my next California vacation - that's for sure. How is it that the future dramatic increase in CA tourism is not calculated into the benefits of legalization?

Marijuana causes short-term memory loss for some people. It is evident if a person is marijuana user because there is an increase in mistakes. For example, it is highly suspicious for YOUNG workers to have short-term memory problems like they are senile.
If you encounter cashiers, servers or waiters/waitresses who are doing the following, then it is evident that they are pot users.
1. Forgetting the orders such as what exactly was ordered after repeating the order to them several times.
2. Giving the order to the wrong customer.
3. Giving the bill to the wrong customer.
4. Forgetting to enter the order into the system, so the cooks can prepare the order.
5. Asking the same questions again and again even though the question was already answered.
This is happening right now. Very young workers with short-term memory problems because they are habitual pot users. Therefore, marijuana is not safe if the person is impaired by it. If you have a YOUNG worker who is forgetful, it is time for a drug test.


The following link is an investigative report into the true intent of California's Cannabis initiative on the 2010 November ballot. Learn about the history of the International push to bring patented GMO terminator Cannabis strains into the U.S. market.

Some of the major players bringing this about are:

The Drug Policy Alliance (DPA), The Marijuana Policy Project (MPP), The
National Organization for the Reform of Marijuana Laws (NORML), George
Soros, Monsanto, Bayer, GW Pharma, the Universities of Guelph,
Massachusetts, and Mississippi, and the DEA.



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