WASHINGTON (AFP) — Amid grim news of record deficits unveiled in the US budget, marijuana advocates are welcoming legislation in US states they say could blossom into billions of dollars in tax revenue.

San Francisco state lawmaker Tom Ammiano introduced a bill last Monday projecting a 14-billion-dollar tax base for the full retail treatment — buying, selling and growing cannabis.

The leading legalization advocacy group behind Ammiano’s bill, Washington-based National Organization for the Reform of Marijuana Laws (NORML), says recession is prompting otherwise skeptical state houses to revisit the ban on marijuana.

Over the last few months NORML has been drafted to work with state lawmakers — even in conservative locales like Texas — on budgetary analysis and review how legalization may enable governments fill yawning deficits.

But legalization opponent Eric Voth is worried “the number of people who will start using or worsen their habit because of the lack of legal constraints is going to cost the system far more than what might be generated through taxation.”

Voth, chairman of the Institute on Global Drug Policy, contends marijuana advocates are “happy to lie to the public” about the gains of their proposals, with an end goal of cannabis legalization “at any cost.”

via AFP: US states mull weed to ease deficit pain.

Uh, Eric?  We’re using the government’s own numbers.  You are quick to call people liars, for example, the sick, disabled, and sense-threatened people you refer to as the “medical excuse movement”.  I think anyone who writes that:

• “Pathologic behavior such as psychosis is also associated with marijuana use” and 
• “Despite arguments from the marijuana advocates to the contrary, marijuana is a dependence-producing drug” and
• “The gateway effect of marijuana along with tobacco and alcohol is also well established in research” and
• “One must then realize that with marijuana the patient is exposed to a veritable “witches brew” of substances, most of which have never been examined for harmful effects.”

…ought to think about putting the rocks down and getting some Windex for that glass house they’re living in.

But let’s take your argument at face value and try to maintain a straight face doing it.  You propose that the legalization of marijuana would end up costing more in social costs through new users and increased use among current users than it would reap in law enforcement savings and direct taxation, plus indirect taxation on the payroll of new employees in this new industry and the economic benefits on ancillary industries that would support the new industry, plus the 800lb. gorilla of legalized industrial hemp farming that would be automatically created (if the marijuana that gets you high is legal, the stuff that doesn’t is going to be, too.)

OK, let’s start with the baseline of right now.  Right now there are about 14M people using marijuana monthly, 25M annually, and 100M lifetime.  Good round figures, close enough for the argument – the survey is for “12 and older”, but legal marijuana would be for adults, so the real number might be smaller, but this is people who are willing to tell a surveyer they do something illegal, so the number might be bigger.  Now, there must be some social cost for this use – TANSTAAFL – and that will be our baseline dollar figure of what marijuana costs society – let’s call it X.

Right now, all the people using marijuana cost society $X per year for the roughly 25 million using it annually.  Now the conservative estimates on taxed and regulated marijuana nationally project $10-$14B annually.  Some project as high as $50B – $300B when you start talking about industrial hemp and ancillary industries and taxable revenue streams.  Let’s lowball it for the sake of easy math – $10 billion a year from legalized marijuana.

Then by your premise there will be enough increase in annual users and usage to generate $10 billion a year in societal costs, offsetting the gains from legalization.  And that has to be new costs, because we already started with a baseline of the existing users and we’ve been absorbing that societal cost, whatever it is, during prohibition.

Now it gets dicey, because we really don’t know what our original $X is.  How do you measure how much it costs society when one person smokes marijuana?  That one person could be me, working sixty-eighty hours a week and running a small business… am I costing you anything?  Is that person a disabled medical patient, who’s actually saving us money by reducing the need for pharmaceuticals that we taxpayers cover through Medicaid?  Is that one person a lawyer who just puffed a joint as it passed by on vacation last summer?  Or is that person one of the 9% who become clinically dependent and he is costing us, somehow?

Anyway, let’s throw a number down: $50 billion a year.  (Hold on, readers, I know it’s ridiculous, but for the sake of argument let’s say 25 million annual tokers cost society $50 billion a year.)  That’s $2,000 per toker, per year, in costs for lost productivity, under employment, social welfare, non-drug crime, cleaning up parks after jam band festivals, whatever nebulous dangers you conceive of in your reefer mad nightmares.  (Again, readers, a ludicrous claim, especially when these same drug warriors tell us breathlessly that “75% of all illegal drug users are employed!”  But roll with me…)

So for there to be an additional $10 billion in costs, you need five million new annual tokers.  Who are they?  There are already 25 million people who smoke annually despite the threat of arrest and incarceration.  There are roughly 200 million adults in the US.  Half of them have never smoked marijuana.  So to get from 25 million to the new figure of 30 million annual tokers (an increase of 20%), 5 million of the 100 million who never smoked pot and the 75 million who “experimented” but don’t smoke now need to start smoking annually, or one new annual smoker out of the 35 who aren’t smoking now.  Who is this person who doesn’t smoke pot now but really wants to – if only it were legal?

The other way to generate your additional $10 billion in costs would be to assume that increased usage among existing users would lead to greater costs.  OK, fair enough.  That would implicitly mean that the annual smoker is less costly than the monthly smoker, who is less costly than the weekly or even daily user.  If an annual user costs Y, then a monthly user should cost 12Y and a daily user should cost 365Y, right?  Maybe not; maybe daily users are 1000x more costly, but whatever, we need some numbers to crunch.  By my reckoning, that means the daily users account for 88% of the societal costs, monthly users 11%, and annual users 1%.  (3M * 365 + 11M * 12 + 11M – remember, a daily smoker is also a monthly and an annual, so you can’t count them twice.)

The government tells me there are about 3 million daily users.   So that $50 billion we talked about earlier, 88% is their fault, or about $44 billion.  That’s about $15,000 per daily user in costs, so to generate that extra $10 billion in costs, you would get it with two-thirds of a million new daily users.  But again, who are they?  You’d need about one out of fifteen of your monthly users to begin using daily to generate that cost, because I don’t really see any of the 25 million annuals, 75 million experimenters, or 100 million never-users to suddenly become daily users.

So, starting with the most conservative estimate of only $10 billion generated from revenue and savings from legalized marijuana and working with absurdly high estimates of the cost of marijuana users to society, you need probably a million people to shift along the never-used | experimented | annual-user | monthly-user | daily-user axis for the costs to outweigh the benefits.  If marijuana really brings in $50-$300B, now you need 5-30 million new smokers to shift.  Either way, who are these people?  Right now with the threat of arrest, 1 out of 8 adults smokes pot annually.  Which one of the other seven isn’t smoking now solely because it is illegal?

RUSH: Do you know what the largest crop in California is? What is the largest crop in California? Brian? Marijuana is exactly right. No, and listen to the numbers. And I’ll tell you why this is important, because the state of California has got this $42 billion budget deficit, and the assembly realizes they’re getting no tax money for it. They’re considering decriminalizing it for the purpose — this is how it all happens. This is how you get rotten socialist economic policies, which lead to the cultural rot of a society. Marijuana is California’s largest cash crop. It is valued at $14 billion annually. That’s nearly twice the value of California’s grape and vegetable crops combined! And these are government statistics. “A recent report pegged marijuana as two-thirds of the economy of Mendocino County, a ganja hotbed north of San Francisco. That’s not surprising — it costs $400 to grow a pound of pot that can sell for $6,000 on the street.

“But the state doesn’t receive any revenue from its cash cow. Instead, it spends billions of dollars enforcing laws pegged at shutting down the industry and inhibiting marijuana’s adherents. Of course, there’s a reason for that. Marijuana’s social costs may include addiction and rehabilitation treatment and lost productivity. Yet these are minute compared with the extensive social costs of alcohol or tobacco. Of course, just legalizing pot wouldn’t automatically harvest revenues for the state. An organized system of regulating sales and collecting taxes would need implementing. And it’s possible that general drug use could rise, though the debate that pot is a gateway drug to harder substances is inconclusive. … Put it all together, and California could potentially wipe some $3 billion off its budget deficit by letting its people puff and pay,” on the largest crop in the state of California. Whoa. As I say, this is how it happens. Economic disasters, bad economic decisions, lead to a cultural rot, as all of this devolves.

via Stack of Stuff Quick Hits Page.

I’m a huge fan of irony.  So you can imagine my delight to hear someone who was loaded on up to 30 Oxycontin a day lecture me about “cultural rot” from legal marijuana.  

It’s an even bigger irony that Rush Limbaugh escaped any charges for illegally “doctor shopping” for those prescriptions and using his maid to pick up the scrips through a rarely used deferred prosecution.  Unlike a deferred judgment, where you plead guilty and then if you keep your nose clean for a time you’re not punished, with a deferred prosecution, Rush wasn’t even charged nor did he have to plead guilty to anything, so long as he kept his nose clean for eighteen months.  It’s like the fact that Rush Limbaugh “received about 2,000 painkillers, prescribed by four doctors in six months” never even happened because he promised to be good.

Meanwhile, in California, where economic disasters are leading to the “cultural rot” that would even consider legalization of a plant infinitely safer than oxycodone, Dr. Molly Fry, Charles Lynch, and Eddy Lepp aren’t lucky enough to get the Rush Limbaugh treatment when they’re caught helping sick people obtain cannabis legally under state law.  They get prosecutions, judgments, and stiff prison sentences.

LOS ANGELES — The state of California — its deficits ballooning, its lawmakers intransigent and its governor apparently free of allies or influence — appears headed off the fiscal rails.

Since the fall, when lawmakers began trying to attack the gaps in the $143 billion budget that their earlier plan had not addressed, the state has fallen into deeper financial straits, with more bad news coming daily from Sacramento. The state, nearly out of cash, has laid off scores of workers and put hundreds more on unpaid furloughs. It has stopped paying counties and issuing income tax refunds and halted thousands of infrastructure projects.

After negotiating nonstop from Saturday afternoon until late Sunday night on a series of budget bills that would have closed a projected $41 billion deficit, state lawmakers failed to get enough votes to close the deal and adjourned. They returned to the capital late Monday morning only to adjourn until the afternoon, though it was far from clear whether they would be able to reach a deal.

via California Lawmakers Struggle to Strike Budget Deal – NYTimes.com.

$41 billion, why, that’s a lot of money!  Can California afford to keep busting people for pot and flying helicopters over the Emerald Triangle to rip up marjuana grows?  According to analysis by California NORML, the state could reap $8-$13 billion from legalized marijuana and hemp:

• An excise tax of $50 per ounce of marijuana would raise about $770 – 900 million per year.
• Retail sales on the legal market would range from $3 – $4.5 billion, generating another $240 – 360 million in sales taxes.
• Legalization would save over $170 million in law enforcement costs for arrest, prosecution, trial and imprisonment of marijuana offenders. Need for CAMP helicopter surveillance would also be eliminated.
• Based on experience with the cigarette tax, total revenues of $1.5 – $2.5 billion might ultiimately be realized.
• Based on experience with the wine industry, the total economic activity generated by legal marijuana could be nearly three times as great as retail sales, around $8 – $13 billion. Amsterdam-style coffeehouses would generate jobs and tourism. 
• If the marijuana industry were just one-third the size of the wine industry, it would generate 50,000 jobs and $1.4 billion in wages, along with additional income and business tax revenues for the state.
• Industrial hemp could also become a major business, comparable to the $3.4 billion cotton industry in California.

That doesn’t completely solve the state’s budget woes, but it’s a beginning.  You’d think it would be something the former pot-smoking governor might contemplate.

Even jury hiring is frozen

Financially strapped New Hampshire has become a poster child for the problem. Among other cost-cutting measures, state courts will halt for a month all civil and criminal jury trials early next year to save $73,000 in jurors’ per diems. Officials warn they may add another four-week suspension.

At least 19 other states, including California, have slashed court budgets and other government services as their economies have tanked, said Daniel Hall, vice president of the National Center for State Courts, a nonprofit in Williamsburg, Va.

California cut its judicial branch budget by more than $200 million, or about 10%, in the current fiscal year, and further reductions are almost certain as the state grapples with a projected $40-billion deficit. A Republican proposal unveiled last week, for example, would trim a further $205 million from the judiciary.

After two rounds of budget cuts in Florida, courts have laid off 280 clerks, lawyers and other staff members, and cut funding for a judges’ unit that helps resolve civil disputes. State legislators meeting next month are expected to demand more spending cuts.

An additional 10% reduction would mean “all civil cases in the state of Florida would virtually be suspended,” Belvin Perry Jr., chief judge of Florida’s 9th Judicial Circuit and chairman of a trial court budget commission, warned a legislative committee in Tallahassee this month.

In Vermont, state Supreme Court Chief Justice Paul L. Reiber recently proposed closing as many as seven county courts, as well as laying off employees, to help ease a budget deficit. The state already shuts district and family courts half a day each week to save money.

It’s bad enough that our schoolchildren have to depend on their teachers to buy paper and pencils and sometimes even toilet paper out of their own pockets because there’s just not enough money to throw at the Pentagon.  But how is it that our states will shut down the very mechanism that ensures our social order – our courts – because enough money cannot be found, and yet when we propose ending adult prohibition of cannabis, they look at us as if we’re sprouting horns and eating babies?

New Hampshire is postponing jury trials to save $73,000 a month.  I guess that would be roughly $876,000 a year.  Currently, New Hampshire spends $20,000,000 per year enforcing adult cannabis prohibition (Miron) and could make $3,500,000 to $5,600,000 per year taxing cannabis sales to adults.

California, Florida, Vermont, and our entire country are desperate for revenue.  Taxing and regulating cannabis similar to hard liquid drugs (alcohol) could generate $10-$14 billion per year in revenue and savings.  A productive hemp industry could add even more revenue with the additional benefit of creating new green jobs.  I’m even willing to bet that with legal cannabis, you’ll see less social harm from other drugs and alcohol.