CALIFORNIA IS TILTING TOWARD THE LEGALIZATION OF MARIJUANA

The voters of trendsetting California may well decide this November
to legalize marijuana-there's a ballot referendum, and 56 per cent of
Californians are in favour-and no doubt this would be great news for
the munchie industry, the bootleggers of Grateful Dead music, and the
millions of stoners who have long yearned for an era of reefer gladness.

Seriously, this is a story about how desperate times require
desperate measures. Legalization advocates, including many ex-cops
and ex-prosecutors, have long contended that it's nuts to keep
criminalizing otherwise law-abiding citizens while wasting $8 billion
a year in law enforcement costs. That argument has never worked. But
the new argument, cleverly synced to the recession mind-set, may well
herald a new chapter in the history of pot prohibition.

It's simple, really: State governments awash in red ink can solve
some of their revenue woes by legalizing marijuana for adults and
slapping it with a sin tax.

So much of the marijuana debate used to be about morality; now it's
mostly about economics and practicality-which is why New Hampshire,
Massachusetts and Rhode Island are also floating measures to legalize
and tax; why similar voter referendums are in the works in Washington
state and Oregon; why 14 states (including, most recently, New
Jersey) have legalized medical marijuana, and why even Pennsylvania,
hardly a pacesetting state, is weighing the sanction of medical pot,
complete with six per cent sales tax. But California is the likeliest
lab for a massive toke tax, given its dire financial straits and the
fact that marijuana is the state's top cash crop, racking up an
estimated $14 billion in annual sales-twice as much as the No. 2
agricultural commodity, milk and cream. State tax collectors say that
pot could put $1.4 billion a year into the depleted California
coffers, which helps explain why 56 percent of Californians like the
legalization option, and find it preferable to the ongoing layoffs of
teachers and other public servants.

Indeed, marijuana is reportedly the top cash crop in a dozen states,
and one of the top five in 39 states-valued annually at anywhere from
$36 billion to $100 billion. That's a lot of money left on the table
for the black market. In fact, five years ago, a Harvard economist
concluded in a report that legal weed nationwide would yield at least
$6 billion in revenue if it were sin-taxed at rates comparable to
alcohol and tobacco.

Actually, I doubt most stoners see themselves as sinners-what's
immoral about seeing "Avatar three times, or strip-mining a tray of
brownies, or punctuating the conversation with lines like, "I'm
sorry, what was I just talking about?"-but most would probably be
willing to pay a "sin tax" in exchange for the opportunity to imbibe,
hassle-free, with no fear that they might join the 765,000 Americans
who were reportedly busted last year for possession.

Pot smokers have long been bugged by the stigma. When I covered a
marijuana reform convention in Washington way back in 1977 (OK, yes,
I'm old), a delegate from Illinois named Paul Kuhn spoke for many
when he complained to me: "You can get rip-roaring, toilet-hugging,
puking drunk in public, and that's OK. But if you pass a joint in
public to a friend, you're a pusher."

But even the reformers of '77 said it was "naive" to believe that
Americans would ever buy legalization. Today's generation is more
shrewd; the word "legalization doesn't even appear in the California
ballot proposal. The proponents, including a retired Superior Court
judge who got fed up with handling pot cases, are calling it the
"Regulate, Control and Tax Cannabis Act."

Frankly, California and other cash-strapped states don't have a whole
lot of sin-tax options. Cigarettes and booze are already taxed to the
max, and (as Philadelphia is discovering) any attempts to slap
special levies on sugared water are fiercely resisted by soda
companies that fear any curbs on their freedom to rot kids' teeth. By
contrast, stoners crave the respectability of being taxed; the
fiercest tax opponents are probably the Mexican drug cartels, which
would lose market share just as the mob lost out on liquor when
Prohibition ended in '33.

Granted, nobody quite knows whether or how the California pot plan
would fly in practice. Pot use would still be illegal under federal
law-the director of the National Drug Control Policy has said that
"legalization is not in the president's vocabulary"-and the U.S.
Constitution decrees that federal law trumps state law. On the other
hand, the Obama team has stated that it has no interest in hassling
the medical-marijuana states.

The big question is how such a sin tax would be structured. Would all
sellers be licensed? Would it be a point-of-sale excise tax on top of
the sales tax? It's worth pondering, because some state is bound to
take the plunge, even if California's voters balk in November-which
could happen because, favorable pot polls notwithstanding,
conservatives riled up by health reform seem most energized to turn
out in disproportionate numbers this year.

The bottom line is that public support for legalizing the crop has
been building for a very long time. Gallup found only 12 percent of
Americans in favor back in 1969, but 31 percent said yes in 2000, 36
percent said yes in 2005, and 44 percent said yes in 2009. The
economic crisis has put wind behind the sentiment, and it seems
inevitable that there will come a day-perhaps in the next major
recession-when a presidential candidate will find it perfectly
politic to speechify about the audacity of dope.