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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)

Puff-puff pass...puff-puff pass legal or not just puff-puff pass

After several years of experience in the Medical Marijuana field, I am amused and disgusted by the countless calls from angry law enforcement officials who will no longer ruin a young (or old) man's life for possession of marijuana, brand them as a felon, and besmirch their image so that they can obtain governmental funds to pay themselves overtime, and create work for their partners on the other side such as defense attorneys, court and custody personnel, and the prison guards and their corrupt union. There is total medical justification to recommend marijuana to anybody asking for it just to prevent the drastic psychological and physical trauma that can result from a law enforcement encounter regarding marijuana.

We all know that marijuana, if smoked on occasion, vaporized or eaten, is the safest drug in our collective medicine cabinet here in the United States. It would be easier to overdose on raisin cookies than marijuana. If the Ph. Dorks at RAND (started as the research and development for the USAF) published this report and admitted that we spend 300M on enforcement costs, a toddler could figure this one out.

My favorite argument against legalization is that marijuana is a gateway drug, and it's been scientifically proven. I am sure I could do "scientific studies" that prove giving candy to a child is a gateway drug to coffee consumption as an adult, or better yet, it is a gateway drug to cocaine or meth-amphetamines. After all, they are all uppers. You can have a caffeine "crash" just like you crash after using cocaine, but not to the same extent. Well, we don't really know that because we would have to compare a child's sugar crash to that of a cocaine crash. I am sure that you could prove that most, if not all speed addicts, ate candy as a child. Don't you think that when marijuana is lumped together with cocaine and heroin a child or teen who has tried smoking marijuana and heard all of the OD horror stories or addict stories may think to him/herself " well if this isn't bad than that can't be as bad as they say, maybe I'll try it for myself."


Please, this is stupid. If it's more potent, then you just smoke half a joint to get off instead of a whole one. And if you smoke the whole one anyway, you just get more mellow, and drink less.

Sure, the Rand corp is non-profit, but that doesn't mean it doesn't serve an agenda. Anybody remember Vietnam?
Just remember three words...prohibition is stupid.

I hope that prop 19 passes. the only reason why i say that is you will take so much away from the little drug dealers only saling weed and to much from the drug cartels in mexico, do you know how much is seized at out of our boarders on a yearly bases and our canyons!!! its in the tons. tax it! better our state by regulating applying new laws to it, as if it was like alcohol. every one wins in our side of our state!! know when to say NO to hard core drugs.

someone had made a comment on here, on what we the tax payers would prefer education or courts and law enforcement. And of course on education! how would a cop know what is a oz or a ton, lb or a yard! or spell. you have to be educated to become a public servant!!

this is gonna be the greatest thing if prop 19 passes because marijuana does not cause kidney/liver damage like (medication) pills do! im also tired of being told i have to take generic medication vote yes on 19

even if it is legalized it will still be sold on the streets

I agree!!! It also has sooo many medicinal uses! My aunt is an insomniac, and the cigarette-hating 80 year old woman takes a few puffs and is able to get a good night's sleep! I know of another person with chronic, miserable pain and he smokes it and his pain is gone. Marijuana is wonderful. Only ignorant, selfish people are against legalizing it! It's definitely NO worse that stinking cigarettes and nasty alcohol!
Hopefully, someday, the USA will see the light, the financial benefits marijuana's sales could help us, as well!
Come on, people, educate yourselves and legalize this useful, no-more-harmless-than-cigarettes-and-alcohol 'drug'!

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