In this 2009 piece from Time magazine, Joe Klein provides some legalize-pot numbers:
there is an enormous potential windfall in the taxation of marijuana. It is estimated that pot is the largest cash crop in California, with annual revenues approaching $14 billion. A 10% pot tax would yield $1.4 billion in California alone. And that's probably a fraction of the revenues that would be available — and of the economic impact, with thousands of new jobs in agriculture, packaging, marketing and advertising. A veritable marijuana economic-stimulus package!
That Joe Klein! He's hilarious when he's high! Actually, his $1.4 billion tally for Cali may substantially underestimate how much making the wacky tabacky legal could bring in. Here's why:
- The Patt Morrison Show recently did a very popular segment on a RAND study that says crime actually goes UP in neighborhoods where marijuana dispensaries are shut down. More crime means more prosecutions, which cost money.
- Back in 2003, a Boston University economist took a look at the legalization economics in Massachusetts and figured savings from not having to continue criminal enforement at $120 million per year. He's now at Harvard.
- Fewer prosecutions means fewer sentences, which mean less incarceration. Each prisoner in the system costs California an average of $47,000 per year, according to the Legislative Analyst's Office
- There are some concerns that legalization would cause the price of pot to collapse. But that could just be a brief downturn, as marijuana finds a larger audience and, like other agricultural products, moves away from small-scale to industrial production. How big could that get? Altria, the company that owns Philip Morris, has a market cap of $54 billion.