California: Cannabis Tax Has $1.4B Potential
Proponents, Including Medical Marijuana Users, Say Untaxed Marijuana Means Needed Revenue Is Going Up in Smoke
By John Blackstone, CBS News
(CBS) There is talk in California of what you could call a radical idea for the cash-poor state to raise money. It's controversial, but proponents say the plan could smoke out more than a billion dollars for the state, as CBS News correspondent John Blackstone reports.
It is an unusual commercial: taxpayers demanding a new tax. It's an offer by marijuana users to help the state's battered budget.
"We're marijuana consumers. We want to pay our fair share."
It's estimated that $14 billion worth of marijuana is sold illegally in the state. Making it legal and taxing it at $50 dollars an ounce would bring in approximately $1.4 billion a year. Assemblyman Tom Ammiano has been pushing the idea.
"I thought it was high time - no pun intended - that this was on the table," he said.
As many see it, marijuana is already virtually legal in California where state law allows it for medical use.
At one Los Angeles dispensary, The Farmacy, the cannabis comes in buds so you can smoke it of course, but you don't have to. There's also cookies and candy bars, also drinks with cannabis as the active ingredient, and gelato - so you can take your medicine like ice cream or lollipops.
One dispensary gave out free pot to anyone with a valid prescription. The line was out the door.
While many doctors say marijuana has valid medical uses, like treating nausea in chemotherapy patients, critics say California's medical marijuana dispensaries sell the drug to almost anyone.
Predict: Marijuana Nation
Will any state legalize marijuana by the end of 2009?
"That system is a sham," said Bernard Melekian of the California Police Chiefs Association. "98 percent of the people who are acquiring marijuana at these dispensaries do not appear to have the conditions for which the law was intended to apply."
At a dispensary in L.A., users claim a wide array of ailments - chronic neck pain, an ankle injury that required 10 screws and a metal plate, and so forth.
In Oakland, a patient named Charles says marijuana is good for his mental health. "It relieves my anxiety and allows me to cope," he said.
Users in Oakland now pay a special city tax on medical marijuana - a first in the state, but maybe not the last. Marijuana tax promoters say a lot of potential revenue is just going up in smoke.