The Big Idea

A WHIFF OF CHANGE?

The voters of trendsetting California well may decide this November to
legalize marijuana - there's a ballot referendum, and 56 percent of
Californians are in favor - 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 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, long have contended that it's nuts to keep
criminalizing otherwise law-abiding citizens while wasting $8 billion
a year in law enforcement costs. That argument never has worked. But
the new argument, cleverly synched to the recession mindset, well may
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 also are 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 6 percent 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 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 reportedly is 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 probably would be willing
to pay a "sin tax" in exchange for the opportunity to light up,
hassle-free, with no fear they might join the 765,000 Americans who
reportedly were busted last year for possession.

Pot smokers long have been bugged by the stigma. When I covered a
marijuana reform convention in Washington way back in 1977, 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 ever would 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 already are taxed to the
max, and 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 probably are
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 still would 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.