STATE'S UNTAPPED POT OF GOLD

With the state Legislature's chief budget analyst saying that
California is now $17.5 billion in the red, only two choices exist to
get us out of this fix: deep cuts in spending or finding new revenue
sources.

Perhaps it's time for serious consideration to be given to legalizing
California's biggest cash crop -- marijuana.

I know, I know. Just bringing up the topic is going to set alarm bells
ringing in some quarters. Let's try to contain our emotions for just a
minute and look at this issue from a purely public-policy and economic
perspective.

Pot advocates say it has already been found to have medical benefits.
In 1996, voters statewide approved Proposition 215, the Compassionate
Use Act, legalizing marijuana for medicinal purposes.

But higher-ups in Washington have since decided that federal anti-drug
laws take precedence over state measures and are thus cracking down on
organizations that seek to make life easier for people with AIDS,
cancer or other ailments.

Beyond the clear medical advantages, though, pot could have an
enormous impact on the struggling California economy, provided the
feds allowed the state to go down that road.

A 1998 report by the National Organization for the Reform of Marijuana
Laws determined that American dope growers earn more than $15 billion
annually on the wholesale market. Only corn, soybeans and hay are more
profitable cash crops.

The annual marijuana crop in California is worth about $4 billion, the
organization found, making it the state's single-most-lucrative
agricultural resource -- more than the production value of grapes and
almonds combined.

Daniel Sumner, an agricultural economist at the University of
California at Davis, noted that a considerable portion of pot's
current cash value lies in its illegal status. Buyers are forced to
subsidize growers' security measures.

Sumner said marijuana's status as the state's largest cash crop would
almost certainly come to an end under legalization as growing costs
fall in line with similar crops, such as tobacco.

As a revenue source, however, he said dope could have a profound
impact on state coffers. Like tobacco, legalized marijuana could be
expected to be sold retail with hefty taxes attached.

Sumner speculated that as much as a 1,000 percent tax on marijuana
might be levied to keep retail costs sufficiently high and thus deter
use by minors.

"It makes more sense to tax things than to ban them," he said. "You
generate revenue and you give people an incentive to behave the way we
want."

Sheri Larsen, a spokeswoman for the California Board of Equalization,
said that if an 8 percent sales tax were levied on a $4 billion
marijuana crop, the state would take in an extra $317 million a year.

But that number is only a fraction of the revenue that would be
expected if Sumner is correct about a whopping dope tax. The
87-cents-per-pack tax on cigarettes, for example, produced $1.1
billion in revenue for California last year.

If the almost 53 percent tax now levied on cigars and other tobacco
products were applied to a $4 billion marijuana crop, this would
result in $2. 1 billion in revenue.

Of course, no law or tax by itself is going to keep kids from
experimenting with forbidden fruit. Researchers at Columbia University
reported last week that teenagers now account for about a quarter of
all alcohol consumed in the United States.

Meanwhile, the U.S. Department of Health and Human Services says
marijuana use by teens has leveled off. About 15 percent of
eighth-graders, 33 percent of 10th-graders and 37 percent of
12th-graders tried pot last year, the department found.

Yet those who argue that keeping marijuana illegal keeps it out of the
hands of youngsters should look at the health department's statistics
for cigarette use.

About 12 percent of eighth-graders, 21 percent of 10th-graders and
nearly 30 percent of 12th-graders smoked cigarettes last year --
almost identical levels as marijuana use.

Kind of makes you wonder if teens would smoke even less dope if some
of the mystique of the drug were stripped away by decriminalization.

As for adults, a nationwide poll in December by Zogby International
found that in light of post-Sept. 11 security concerns, 61 percent
oppose arresting and jailing nonviolent marijuana smokers.

It is, of course, a stretch to think that lawmakers, either at the
state or federal level, would risk their political necks on an issue
like this. You can just imagine how they'd get pounded by
conservatives.

Robert MacCoun, a professor of public policy and law at the University
of California at Berkeley, spent 10 years studying worldwide drug
policies. He concluded in the book "Drug War Heresies" (co-authored
with economist Peter Reuter) that removing penalties for marijuana
does not lead to increased use.

The only way use of legalized pot would significantly increase,
MacCoun told me, would be if dope smoking was aggressively promoted by
profit-hungry corporations, a la the tobacco industry.

If advertising could be restricted, he said, "it's hard to show social
harm from widespread marijuana use."

Me, I'm kind of conflicted. I don't do drugs anymore -- haven't for
many years -- but I did smoke pot back in college, and must say I
enjoyed it quite a bit.

I never regarded dope as anywhere near as harmful or dangerous as
alcohol or cigarettes, and certainly nowhere in the same league as
harder drugs.

It's only a matter of time, though, before my young son confronts the
temptations of the world, and I have to be honest when I say I'd
prefer he didn't mess with any mood-altering substances. I'm not yet
sure what I'm going to tell him.

But I do agree with UC Davis' Sumner that taxation and regulation are
far more effective tools than prohibition in keeping people from
indulging in vices.

Keeping marijuana illegal just doesn't make sense. And for a state
that grows tons of it, and which can't pay its bills, legalization
might at last be a very smart move indeed.