TAX INITIATIVE BACKERS CITE ALCOHOL'S EXAMPLE

The wine industry is one of California's shining economic successes.
An economic impact study conducted for the state's Wine Institute in
2006 reported the industry sustains 309,000 full-time jobs that
generate $10.1 billion in wages.

Factoring in excise and sales taxes, as well as taxes on corporate
profits and income taxes paid by workers, the study concludes the
industry provides $3.2 billion in revenue each year to state and
local governments. And that's with the second-lowest excise tax on
wine of any state in the nation, just 20 cents a gallon.

To Dale Gieringer, coordinator of the California chapter of the
National Organization for the Reform of Marijuana Laws, numbers like
that yield a vision of the economic benefits a legal market for
marijuana in California might produce.

In a report submitted to the Legislature in October, Gieringer
offered these projections:

. An excise tax of $50 per ounce, as proposed in current legislation,
would equate to about $1 for each marijuana cigarette, or joint, and
yield about $900 million a year.

. Retail sales taxes would produce about $300 million a year.

. A legal marijuana industry would generate total economic activity
in the state of about $15 billion.

Ventura attorney James Devine, who represents clients in the existing
medical marijuana industry, states the vision more poetically.

"Who are my clients? They're real estate brokers, contractors, people
who've been hurt by the recession," he said. "They're already
businesspeople. They want to make money I see fields of cannabis
getting us out of a recession."

Whatever the potential economic development impacts, the dollar signs
that proponents of legal marijuana believe will turn people's heads
are in the potential tax revenues.

Richard Lee, the founder of Oakland's Oaksterdam University and
sponsor of a legalize-pot ballot initiative all but certain to
qualify for the November ballot, said he decided to pursue the
initiative this year after his private polling showed a dramatic
shift in public attitudes from just two years ago.

Why did his polls show a shift from opposition to legal marijuana to support?

"Unemployment, city budgets are hurting and the state budget's a
fiasco," he said.

That's why he titled his initiative, "The Regulate, Control and Tax
Cannabis Act of 2010" and why he named his ballot committee "Tax
Cannabis 2010."

The initiative would give local governments first crack at taxing
marijuana, Lee said, but would also allow the Legislature to
establish statewide regulations and taxes. It does not cite any
specific level of taxation.

A bill by Assemblyman Tom Ammiano, D-San Francisco, specifies a $50
per ounce excise tax on marijuana.

In an analysis of the bill, the Board of Equalization estimates such
a tax rate would generate $1.25 billion in annual tax revenue to the
state and an additional $120 million in local sales taxes.

That amount of revenue would hardly close the state's $20 billion
budget shortfall, let alone allow for the restoration of cuts made
last year. Still, Lee said, he believes there is an obvious
constituency for a marijuana tax -- students, government workers and
recipients of government services who have been hurt by the ongoing
budget crisis.

"We expect," he said, "that there will be a natural alliance with
college students who've had their tuition raised and their classes cut."