MARIJUANA VALUATIONS IN CALIFORNIA ARE HALLUCINATIONS

Estimates of dollars from illicit activity are notoriously
fantasy-ridden. Yet state officials say a bill taxing weed could bring
in more than $1 billion a year.

The first time I heard the claim that marijuana was California's
biggest cash crop, I thought nothing of it. Nor the second time, or
the third.

Round about the 15th time, when it became evident that the claim had
gained the status of received wisdom, I took notice. Two things
immediately occurred to me. One: Sez who? Two: Whoever it is, what is
he smoking?

Valuations of illicit activity, whether it's drug sales, street crime
or porn distribution, are notoriously fantasy-ridden. After all, it's
hard to track cash businesses disinclined to release timely financial
results.

Yet the media accept such figures as gospel. In the last few months,
marijuana's supposed top rank in California agriculture has appeared
in newspapers across the country, including this one, and been cited
on CNN and NBC. Often it's accompanied by other turbocharged stats, to
the effect that the value of the state crop is $14 billion, part of a
nationwide marijuana trade worth more than $100 billion a year
(including imports).

I'm sure it's coincidental that these figures are appearing just when
the pot lobby has discovered that the fiscal argument for legalization
has acquired real traction among cash-strapped state legislatures. In
Sacramento, where a legalization bill has been introduced by
Assemblyman Tom Ammiano (D-San Francisco), state officials say that
taxing weed could bring in more than $1 billion a year.

Here's my view on the right approach to all such statistics: Forget
you heard them.

"We're talking real broad strokes here," Jon Gettman, a former
president and national director of the National Organization for the
Reform of Marijuana Laws (NORML), told me last week.

Gettman's words should be heeded. He's the man who, in a 2006 study,
first anointed marijuana as California's king crop. In the paper he
essentially piles one guesstimate upon another to obtain a number that
looks, but isn't, factual.

Let's start, as Gettman did, with a standard quantification of U.S.
domestic cultivation today: 10,000 metric tons, or 22 million pounds.
This figure has a curious history. It first appeared in a 2003 report
by the Bush White House. Yet, as Gettman observed, that was nearly
triple the estimate of 3,500 metric tons the feds had been using for
years.

Why the sudden change? No one is sure. Maybe crop estimating
techniques suddenly entered a golden age. Maybe marijuana growers all
decided to grow three plants where they had grown one. Or maybe
anti-dope zealots in the White House thought the old number looked too
paltry.

The government backpedaled in 2007, when the Justice Department
estimated the domestic crop at 5,650 to 9,417 metric tons. That's a
huge margin -- like saying the distance from L.A. to New York is
between 1,000 and 6,000 miles.

The agency, it seems, added up the total amount of marijuana reported
seized by law enforcement agencies and guessed at the percentage of
the total crop the cops had found. Its analysts figured the ratio was
30% to 50%, but didn't say how they came to that conclusion or, for
that matter, why it might not be 10% or 90%.

In his paper, Gettman used a ratio of about 10%, a rule of thumb he
validated partially by observing that it translated the 1,215 metric
tons seized in 2001 into a figure for total cultivation "consistent
with the federal government's widely reported estimate of 10,000
metric tons." So it seems he accepted one conjectural number in part
because it validated another conjectural number.

Gettman acknowledges that concrete information is exceedingly scarce
in this field. "When you drill down, the only hard fact is they seize
a lot of plants," he said.

The "soft facts" include the size in dollars of the U.S. marijuana
market. Gettman's 2007 estimate of $113 billion is in the stratosphere
compared with some others. In a 2001 report, the federal government
pegged the black market at $10.5 billion, a discrepancy that suggests
either that we became a nation of total potheads over the following
few years, that pot prices experienced an inflation rate that would
make the rise in college tuition look sick or that somebody's numbers
are way off.

We should keep in mind that purveyors of statistics about illicit
activity often inflate them -- whether to claim legitimacy for the
activity, or (if they are law-enforcement agencies) to frighten voters
into supporting funding for more officers, guns and
helicopters.

Indeed, one goal of Gettman's 2006 paper was to prove that prohibition
was a waste of money by showing that the war on drugs hadn't prevented
the pot crop from growing explosively. That would give him an
incentive to both low-ball the seizure ratio and high-ball the total
crop. I'm not saying he did so, only that we shouldn't be entirely
shocked that the figures he settled on happened to support his position.

On the basic issue of whether marijuana should be legalized, there are
reasonable arguments on both sides. Prohibition does place a huge
burden on all levels of government -- tens of billions of dollars a
year squandered on arresting, trying and jailing sellers and users --
not to mention the lives ruined for what is largely a victimless crime.

But the toll from dependency on the legal drugs of alcohol and tobacco
is also heavy. Legalization advocates argue that regulating rather
than criminalizing pot would give us tools to combat underage use, a
precursor to lifelong drug abuse. On the other hand, allowing the
master marketers at, say, Philip Morris and Anheuser-Busch to hawk yet
another mind-altering product wouldn't be a great way to encourage
"responsible" use. (That's why UCLA public policy expert Mark Kleiman,
for one, advocates limiting any legal market to nonprofit consumer
co-ops.)

The real danger is that voters, overcome by pot-inspired visions of
dancing dollar signs, will make their judgment about the legal status
of the drug without fully considering these pros and cons. The truth
is, no one really knows how much money legalization might earn for the
public purse, or whether the gains would outweigh the costs. If you're
proffered the argument that the best reason to legalize marijuana is
that it's a guaranteed budgetary windfall, my advice is: Don't inhale.