A revised budgetary analysis by the California State Board of Equalization (BOE) estimates that taxing and regulating the retail sale of cannabis by adults would raise approximately $1.4 billion in annual new state revenue.

The BOE’s estimate, released late yesterday, assesses a $50 per ounce tax on the retail sale of cannabis (among other state-imposed costs), as recommended under Assembly Bill 390: The Marijuana Control, Regulation and Education Act.  This act seeks to license and tax the commercial production, packaging, and retail sale of marijuana to those 21 years of age or older.

As introduced, AB 390 would not impose taxation or licensing requirements on the non-commercial production of cannabis (up to ten mature plants), or on the not-for-profit distribution of pot.  Further, the bill would not alter existing legislation on the use of medicinal cannabis, nor would it impose new taxes or sanctions on the medical cultivation of cannabis.

According to the BOE’s revised calculations, the enactment of AB 390 would raise an estimate $990 million annually from the proposed $50 per ounce levy on retail sales of marijuana in addition to another $392 million in yearly sales tax revenues.

The BOE assessment did not assess whether the enactment of AB 390 would reduce existing law enforcement and prosecutorial costs, which have been estimated by California NORML to average some $200 million per year.  In 2007, a record 74,000 Californians were charged with marijuana offenses – the largest total since the state ‘decriminalized’ the personal possession of small amounts of marijuana in 1976.

The BOE report acknowledged that legalizing pot for adults would likely result in a “substitution effect” where consumers gravitate toward the use of marijuana “and away from cigarettes and alcohol.”

According to a May 2009 California Field poll of 901 registered voters, 56 percent of Californians say that lawmakers should “legalize marijuana for recreational use and tax its proceeds.”  Presently, the state is facing a $26 billion budget deficit.

Assembly Bill 390 is presently before the Assembly Committees on Public Safety and Health, which are expected to take up the issue early next year.

The $14 billion check total represents the combined savings and tax revenues that would be generated by regulating the sale and production of cannabis like alcohol, according to a 2005 analysis by Harvard University senior lecturer Jeffrey Miron and endorsed by over 500 distinguished economists.

Media representatives from CNN, Fox News, Sirius Satellite Radio, and other news outlets were on hand to cover the event.

“On a day when so many Americans lament having to pay state and federal income taxes, we’re representing America’s millions of otherwise law-abiding cannabis consumers, who are ready, willing, and able to contribute to our struggling economy — while providing truly ‘green’ jobs and allowing police to focus on more important priorities,” NORML told reporters. “All we ask in exchange for our $14 billion is the right to enjoy pot responsibly and in peace.”

Additional background information and photos from this morning’s event are available at The Huffington Post here, and at The Hill‘s Congress blog here. As always, NORML encourages you to leave your feedback in support of marijuana law reform at these to influential blog sites.

NORML is holding follow up, public protest later today at 4:20pm est. We hope to see you there!

What would you do with an extra $14 billion dollars? NORML will be asking the Obama administration that very question tomorrow when Executive Director Allen St. Pierre will present a mock check to the U.S. Treasury Office at a press conference on the steps of the General Post Office in Midtown Manhattan in New York City.

WHO
Representatives of the National Organization for the Reform of Marijuana Laws, including NORML’s National Director Allen St. Pierre, and New York NORML

WHAT
Marijuana law reformers will present a $14 billion check to the U.S. Treasury

WHEN
April 15th, 2009 at 8:00 AM (press conference with mock check) and 4:20 PM presentation of check with NORML supporters.

WHERE
The steps of the General Post Office in Manhattan
441 Eighth Ave
New York, NY

If you reside in the New York area, please consider showing your support for marijuana legalization by attending this event.  Taxing and regulating doesn’t just make sense, it makes ‘cents’ too!

Legalizing Pot Makes Lots of Cents for Our Cash-Starved Government
via Alternet.org

What could you do with an extra $14 billion dollars? Members of the National Organization for the Reform of Marijuana Laws (NORML) and other likeminded organizations will be asking government officials that very question on Wednesday, April 15th, when they present a mock check to the U.S. Treasury Office.

“We represent the millions of otherwise law-abiding cannabis consumers who are ready, willing, vocal and able to contribute needed tax revenue to America’s struggling economy,” says Allen St. Pierre, NORML’s Executive Director. “All we ask in exchange for our $14 billion is that our government respects our decision to use marijuana privately and responsibly.”

But it’s not just NORML that is calling on lawmakers to tax and regulate marijuana. In today’s economic climate, the question is: who isn’t?

Late last month, during President Barack Obama’s first-ever Internet Town Hall, questions pertaining to whether legalizing marijuana like alcohol could help boost the economy received more votes from the public than did any other topic. The questions’ popularity — and the President’s half-hearted reply (“No,” he laughed.) — stimulated a torrent of mainstream media attention. In the past two weeks alone, commentators like David Sirota (The Nation), Kathleen Parker (Washington Post), Paul Jacob (TownHall.com), Clarence Page (Chicago Tribune), and Jack Cafferty (CNN) have all expressed sympathy for regulating pot. Even Joe Klein at Time Magazine weighed in on the issue, writing this month that “legalizing marijuana makes sense.”

It makes cents too.

According to a 2005 analysis by Harvard University senior lecturer Jeffrey Miron — and endorsed by over 500 distinguished economists — replacing pot prohibition with a system of taxation and regulation similar to that used for alcohol would produce combined savings and tax revenues of between $10 billion and $14 billion per year.

A separate economic analysis, conducted by George Mason University professor Jon Gettman in 2007, estimates that the total amount of tax revenue derived from cannabis could be far higher. According to Gettman, the retail value of the total U.S. marijuana market now stands at a whopping $113 billion per year. Using standard tax percentages obtained from the Office of Management and Budget, he calculates that the diversion of this market from the taxable economy deprives taxpayers of $31.1 billion annually.

For local and state governments, taxing and regulating pot could help reduce growing deficits. For instance, in Oakland, California the City Council gave preliminary approval last week to a proposal to raise the business tax paid by city-licensed medical marijuana dispensary operators. Council members estimate that the new tax will raise anywhere from $400,000 to a “couple million” dollars annually.

Likewise, lawmakers in Massachusetts and California are debating statewide measures to tax and regulate the production and sale of cannabis to adults. Both state proposals would impose a fixed excise tax on the retail production of marijuana — non-retail cultivation would remain untaxed — as well as sales taxes on the commercial sale of the drug to anyone 21 years and older.

“The revenue effect of the proposed Act is an estimated annual revenue gain of $1.339 billion,” says the California State Board of Equalization and Taxation, which is backing the measure. A more liberal economic assessment performed by California NORML’s Dr. Dale Gieringer estimates that the annual revenues raised via the advent of a legal cannabis industry in California could be far higher.

“A comparable example would be California’s wine industry,” Gieringer wrote in a 2009 report. “With $12.3 billion in retail sales, the wine industry generates 309,000 jobs, $10.1 billion in wages, and $2 billion in tourist expenditures. Extrapolating these figures to a legal marijuana market, … one might expect $12 to $18 billion in total economic activity, with 60,000 to 110,000 new jobs created, and $2.5 to $3.5 billion in legal wages, which would generate additional income and business taxes for the state.”

Finally, taxing and regulating cannabis would have the added bonus of taking the production and trafficking of pot out of the hands of criminal enterprises and, increasingly, drug gangs. According to the Associated Press, marijuana is the “biggest source of income” for Mexican drug cartels. Legalizing pot would eliminate this primary income source for these cartels and, in turn, eliminate much of the growing violence and turf battles that currently surround the drug’s illegal importation from Mexico.

Any way you look at it, legalizing cannabis just “makes sense.” So why aren’t we doing it?