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California could raise $2 billion

Legal Pot Could Bring California $2 Billion

Legalization of marijuana is a great idea in California, and not just because it would make life easier, cheaper, and safer for pot smokers (and everyone else). It could also make the state quite a bit richer than it already is.

The office of the state’s Legislative Analyst reported in August that two propositions on the November ballot – including one that would legalize cannabis for any adult use – would likely generate more than $2 billion in tax revenue each year.

Prop. 64 is the marijuana initiative, also known as the Adult Use of Marijuana Act. It would legalize purchase, possession, and use of marijuana for recreation. It would also provide rules and taxes for a legal cannabis industry across the state.

The Legislative Analyst’s office estimated in an official report that the initiative would bring in hundreds of millions of dollars in tax revenue at least, possibly as much as $1 billion annually. Prop. 64 has strong public support and is widely expected to pass at the ballot box Nov. 8.

Funding schools and drug-abuse education

If it does, adults in California will be allowed to possess up to 1 ounce of marijuana for personal use and to grow up to four plants. The AUMA also provides protections for children and directs much of the tax money to pay for schools and drug-abuse education programs.

Marijuana and Money

A long and growing list of political leaders and policy organizations have endorsed the proposal, including Lt. Gov. Gavin Newsom, the state’s branch of the NAACP, and the California Medical Association. Legalization is also in the official platform of the state Democratic Party, which dominates every branch of state government.

Tech billionaire Sean Parker, a onetime president of Facebook, is leading the campaign to reform California’s outdated pot laws. His group has raised about $9 million, compared to less than $1 million raised by opponents of the initiative.

Huge implications for future of marijuana reform

The outcome of the marijuana vote could have huge ramifications for the future of reform. Once California goes legal, it will become harder for other states to hold off the inevitable tide of legal cannabis. Even federal law might change following a victory in the Golden State.

“California is a game changer in this debate”

“California will be asked to do something that will change the debate nationally in terms of failed drug policy,” Newsom said earlier this year. “California is a game changer in this debate. It’s significant what’s happened in Colorado, Washington, Alaska, and Oregon, but it will pale in comparison to the decision the taxpayers, the voters of this state will be asked this November.”

Marijuana Jar

Another, related ballot initiative seeks to tackle tobacco, a far deadlier drug than marijuana, by imposing a new $2 sales tax on each pack of cigarettes and an equivalent tax on other tobacco products. The revenue from those taxes could add up to another $1 billion, the Legislative Analyst’s office reported.

The state recently became the first in the nation to raise the legal smoking age to 21 from 18. Cigarette use has been on the decline in California and elsewhere in recent decades, but higher prices and a higher age limit will likely cut the rate even further.

Tell us what you think: What should California do with tax revenue from legal marijuana? Leave a comment below.

About Matt Brooks

Based in San Francisco, Matt is a journalist who has specialized in marijuana policy for more than five years. He provides regular news coverage on and

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