ANALYSIS SHOWS MARIJUANA TAX WOULD GENERATE $1.4 BILLION

SAN FRANCISCO — A bill to tax and regulate marijuana in California
like alcohol would generate nearly $1.4 billion in revenue for the
cash-strapped state, according to an official analysis released
Wednesday by tax officials.

The State Board of Equalization report estimates marijuana retail
sales would bring $990 million from a $50-per-ounce fee and $392
million in sales taxes.

The bill introduced by San Francisco Democratic Assemblyman Tom
Ammiano in February would allow adults 21 and older to legally
possess, grow and sell marijuana.

Ammiano has promoted the bill as a way to help bridge the state's
$26.3 billion budget shortfall.

"It defies reason to propose closing parks and eliminating vital
services for the poor while this potential revenue is available,"
Ammiano said in a statement.

The way the bill is written, the state could not begin collecting
taxes until the federal government legalizes marijuana. A spokesman
says Ammiano plans to amend the bill to remove that provision.

The legislation requires all revenue generated by the $50-per-ounce
fee to be used for drug education and rehabilitation programs. The
state's 9 percent sales tax would be applied to retail sales, while
the fee would likely be charged at the wholesale level and built into
the retail price.

The Equalization Board used law enforcement and academic studies to
calculate that about 16 million ounces — or 500 tons — of marijuana
are consumed in California each year.

Marijuana use would likely increase by about 30 percent once the law
took effect because legalization would lead to falling prices, the
board said.

Estimates of marijuana use, cultivation and sales are notoriously
difficult to come by because of the drug's status as a black-market
substance. Calculations by marijuana advocates and law enforcement
officials often differ widely.

"That's one reason why we look at multiple reports from multiple
sources — so that no one agenda is considered to be the deciding or
determining data," said board spokeswoman Anita Gore.

Advocates and opponents do agree that California is by far the
country's top pot-producing state. Last year law enforcement agencies
in California seized nearly 5.3 million plants.

If passed, Ammiano's bill could increase the tension between the state
and the U.S. government over marijuana, which is banned outright under
federal law. The two sides have clashed often since state voters
passed a ballot measure in 1996 legalizing marijuana for medical use.

At the same time, some medical marijuana dispensary operators in the
state have said they are less fearful of federal raids since U.S.
Attorney General Eric Holder said the Justice Department would defer
to state marijuana regulations.