Enough with the doctors' prescriptionsand medicated gummy worms—how much money can California and Sacramento rake in if marijuana is legalized?
It's a question political leaders and traditional media outlets are not just quietly wondering—they're straight-up shouting it out loud on the heels of Colorado and Washington's big free-weed moment.
Because, frankly, the payday's looking pretty sweet. Up north in Washington, its Office of Financial Management estimated in August 2012 that legalization would generate the state more than $500 million in tax revenue annually just through the implementation of a pot tax. And that's just special tax revenue alone, not total economic impact.
Bloomberg business news said that marijuana could eventually be upward of a $110 billion industry in the United States. That's right: on par with the domestic beer market.
Here in Sacramento, pot revenue has been smaller nugs, but all the while a meaningful chunk of change. The city's marijuana tax alone—which levies an additional 4 percent on medical-cannabis dispensary retail sales—initially brought more than $110,000 a month during the summer of 2011. That is, until the U.S. attorney's crackdown in the fall of that year, which forced many dispensary owners to close for fear of Uncle Sam's retribution (now the tax brings in less than $30,000 a month).
Imagine if that tax revenue continued, or if there was a similar tax in the county. Plus, there are other economic incentives, such as jobs (a single dispensary employs dozens, including security, delivery, even graphic-design workers), state taxes, fees and more. Those in the local medical-marijuana community have told city and county leaders that the plant's economic impact on the Sacto region could add up to upward of $250 million.
That makes sense: Sacramento is the sixth-largest city in the state, and Time magazine recently wrote that if California legalized pot, it would immediately become the state's No. 1 cash crop, with more than $14 billion in annual sales alone.
This is not to mention the savings that would result from ending the “war on weed.”
For instance, Harvard University economist Jeffrey Miron wrote in 2012 that the United States would pocket $7.7 billion each year if it didn't have to enforce marijuana prohibition. His paper, which was published last summer, bore the supporting signatures of more than 300 economists, including three Nobel laureates.
Forbes magazine was even more ambitious with its prognostication, arguing that if the war on marijuana ended, America would save $41 billion from nonenforcement.
More savings abound, such as those that would result from moving dollars from the Mexican drug cartels to the American economy: Think tank the RAND Corporation estimated, for example, that legalized bud in California would suck away 4 percent of the cartels' income.
A pot of gold, indeed.