POT COULD BE GOLD FOR CALIFORNIA

But First, Says Froma Harrop, Obama Needs to Change His Mind on Legalization

The popular TV series Weeds is about a widowed suburban mother who
deals pot to preserve her family's cushy California dream. Not a few
Californians would like to see the theme writ large for their state.
California has legalized medical marijuana, its cannabis crop is
valued at $17 billion a year, and people there smoke pot openly. But
the state can't collect a penny of revenue from the enormous enterprise.

As California faced budget Armageddon, Gov. Arnold Schwarzenegger
called for "a debate" on the potential of tapping marijuana as a
source of tax revenue. That's all he can do, because federal law still
criminalizes marijuana use. Harvard economist Jeffrey Miron has
already calculated the sort of revenue California and other states
could see were marijuana taxed like cigarettes and alcohol.
California's share would easily top $100 million a year.

But that's the least of it. Miron puts California's costs of enforcing
the marijuana ban - policing, the courts, jail time - at $981 million
a year.

Nationally, legalizing marijuana would save $7.7 billion a year on
drug-war spending, according to Miron. And the government could raise
$6.2 billion annually in tax revenues.

A vain hope rose that President Barack Obama's naming of Gil
Kerlikowske as drug czar would lead to a more rational and humane
policy on drugs. As Seattle's police chief, Kerlikowske oversaw the
city's annual Hempfest (a giant and mellow smoke-in) without bothering
the celebrants. But Kerlikowske announced this month that "marijuana
is dangerous and has no medicinal benefit." And to end any idea that
the hip, liberal Obama administration would ease up on pot, he added,
"Legalization is not in the president's vocabulary, and it's not in
mine."

Obama readily admits having used marijuana in his youth (in addition
to cocaine). And every year, many thousands of Americans are arrested
and their lives ruined for doing what he did. Does Obama get to be
president only because he wasn't caught?

Miron is a libertarian who sees all drug prohibition as interfering
with people's private lives. But he well understands the politics that
stop politicians from taking the no-brainer position on marijuana.

"Democrats know that the potheads are going to vote for them anyway,"
he told me, "and the people on the other side who care about this
stuff know that this is really a big deal." If marijuana were
legalized, and the sky didn't fall in, many drug laws would crack.

In previous economic downturns, state and local governments had turned
to casinos and other gambling for revenues. These tough times may push
legislators to ease their umbrage over additional "sinful" activities.

If they want to tax marijuana, they'll have to legalize it. But even
the lesser step of decriminalization - whereby people may possess
marijuana but not sell it - would save the billions spent going after
users.

Selling the public on expanded gambling and legalized marijuana
require different arguments. Casino gambling was already permitted in
Las Vegas and Atlantic City, so Americans were used to the idea when
other states started allowing it. And of course, there's a long
history of wagering at racetracks or church bingo games. Marijuana was
never part of the official culture.

Marijuana does have an advantage over gambling as a revenue source: It
doesn't compete with other taxed businesses. Casinos take
entertainment dollars away from restaurants, amusement parks and movie
theaters. Legal marijuana would take business away from foreign drug
gangs.

A bill to "tax and regulate" marijuana like alcohol now before the
California legislature has strong support. But it's not going anywhere
as long as "legalization" is not in Obama's vocabulary. The word
"hypocrisy" has apparently made the cut.