POT IS A POTENTIAL REVENUE GOLD MINE, POLITICIAN ARGUES

Lawmaker Says Taxing Marijuana Could Undo Deep Cuts To Drug, Alcohol Programs

Mary Lou Dickerson had seen enough. After wrenching cuts to
Washington's state drug and alcohol treatment programs, Dickerson, a
Democratic representative, introduced a bill this year to sell
marijuana in state liquor stores -- and tax it.

Dickerson is an unlikely crusader for marijuana legalization. A
63-year-old grandmother who doesn't use it, she says money was the
reason for proposing her controversial bill.

"According to the state's own estimates, it would bring in an
additional $300 million per biennium," she says. "I dedicated [in the
bill] a great deal of the proceeds from the tax on marijuana to treatment."

The proposal died in committee, but Dickerson, who chairs the state's
House Human Services Committee, expects to reintroduce it. Other
advocates in almost two dozen states have been making similar efforts
to loosen marijuana laws.

This has been a bumper year for marijuana legislation, according to
state policy observers. Crushing state budget deficits gave advocates
in California, Washington, New Hampshire, Rhode Island, New York and
elsewhere an opening to pitch marijuana as a new source of tax revenue.

At the same time, the Obama administration gave users and
distributors some breathing room by signalling in October that it
would scale back on prosecuting them as long as they comply with state law.

Eighteen states discussed medical marijuana through legislation or
citizen initiatives this year. California election officials
announced on March 24 that this year's ballot would include a
question to allow local governments to legalize and tax marijuana,
casting a spotlight on the state that first legalized medical
marijuana in 1996.

While most state legislative efforts are likely to fail, a victory in
California could encourage other states to follow suit just as they
did when California approved medical marijuana.

States shouldn't count on a revenue bonanza from marijuana since
distributors still risk federal prosecution by emerging from the
shadows, according to Robert Mikos, a Vanderbilt University law professor.

2009 poll found 56 per cent of California voters support outright
legalization. Estimates from California's Board of Equalization peg
the amount the state could raise from legalization at $1.4 billion.

But those projections rest on shaky assumptions that the state could
keep track of growers and that distributors would accurately disclose
their sales, if at all. And since marijuana is still illegal under
federal law, it's unclear how the Obama administration would react to
more permissive state laws.

States shouldn't count on a revenue bonanza from marijuana since
distributors still risk federal prosecution by emerging from the
shadows, according to Robert Mikos, a Vanderbilt University law
professor. Ideally, the thousands of small-scale marijuana farm
operations would consolidate into larger groups that would be easy
for states to tax, but the federal ban makes that unlikely, he says.

"If you get too big, you attract the attention of the federal
government. If you're a mom-and-pop marijuana distributor in
California right now, you have almost no concern about the federal
ban," Mikos says.

Also, states would have to keep track of growers who have paid taxes.
"That's a gold mine of information for the federal government," Mikos
says. "If California requires marijuana distributors to keep records
of all their sales, the federal government could sweep in, take that
information and use it to prosecute these people."