LEGALIZATION COULD SLASH THE PRICE OF POT

Cost Could Drop to $38 Per Ounce If Proposition 19 Passes, Study Finds.

California's cash crop could become dirt cheap if the state legalizes
marijuana.

Researchers associated with the Rand Corp.'s Drug Policy Research
Center said Wednesday that not much is certain about the potential
impact of Proposition 19 except that the price of California's
choicest weed could plunge more than 80%, down from $300 to $450 per
ounce to about $38.

"That's a significant drop," said Beau Kilmer, co-director of the
center. "We're very clear about the fact that the price will go down."

The implications of such a drop would be profound. Kilmer and four
other researchers who analyzed marijuana legalization said
consumption would rise, but they could not determine with any
certainty by how much. "We cannot rule out increases of 50% to 100%
or perhaps higher, but we just don't know," he said.

Such a low price could also affect pot prices across the nation,
encourage marijuana tourism in the state, increase the amount of pot
shipped out of state, disrupt the smuggling of marijuana from Mexico
and stimulate an underground market designed to avoid high taxes that
might be imposed.

Rand, the Santa Monica-based nonpartisan research institute, had five
prominent drug policy experts spend about six months examining what
might happen to marijuana use and tax revenues if Californians
approve the measure on the November ballot or the Legislature passes
a bill introduced by Assemblyman Tom Ammiano (D- San Francisco) that
would legalize pot and impose a $50-per-ounce tax.

The report called "Altered State?" is the most scholarly examination
of the issue so far. It is likely to be scrutinized and cited by both
sides in the debate.

"The uncertainty and the potential chaotic nature of what could
happen here just totally derails this initiative," said Roger
Salazar, the spokesman for Public Safety First, one of four
opposition committees that plan to fight the initiative. "Outside of
the prices going down there is nothing else that is certain here and
certainly not worth having the state of California become the first
entity in the world to completely legalize production and sales of marijuana."

Stephen Gutwillig, the California director of the Drug Policy
Alliance, said: "The current system is loaded with the certainty of
mass arrest, racist enforcement and boondoggle law enforcement
expenses to the tune of hundreds of millions of dollars," he said.

The report noted that it was impossible to predict tax revenues from
the initiative, which leaves that decision to cities and counties,
but concluded that revenues from a statewide $50-per-ounce tax could
range from $650 million to $1.49 billion.

To calculate the price drop, researchers looked at the cost of
growing marijuana in a 1,500-square-foot house. The researchers
concluded that the wages paid to employees who tend the crop would
slip from as much as $25 per hour to no more than $10, just a little
above what nursery laborers earn.

The report is likely to make it even harder for legalization
advocates to persuade the state's growers and suppliers, particularly
in the Emerald Triangle, to support the initiative. The triangle area
includes Humboldt, Mendocino and Trinity counties.

Dale Gieringer, director of the state chapter of the National
Organization for the Reform of Marijuana Laws, who has also looked at
the issue, said the calculated price drop sounded reasonable, but he
said it would not occur overnight. "It will descend slowly, is the
likely scenario," he said. "If you took it out of the statute book
and dealt with it like parsley, yes, it would plummet."

He acknowledged that consumption would probably increase if
Proposition 19 passes, but said it is half the level it was in the
late 1970s. "Fads come and go, drugs come in and out of fashion," he
said. "I think we're in for a short-term increase in marijuana
consumption regardless of whether the initiative passes."

Researchers also looked at estimates of the cost of enforcing
marijuana laws in California, which range from $200 million to $1.9
billion, and put it at "probably less than $300 million." They also
concluded that it is not possible to determine whether increased use
would lead to more drugged driving accidents and to more use of
harder drugs, such as cocaine, finding that the research is inconclusive.