MARIJUANA TAX WORTH $28.6 MILLION, STUDY SAYS

CARSON CITY -- A UNLV study released today said Nevada would receive $28.6
million a year in additional revenue if voters approved Question 9 and the
state taxed marijuana.

The study by the Center for Business & Economic Research based its
conclusions on 75,000 people, 5 percent of the adult population, using an
average of 12 grams, less than a half-ounce, of marijuana per month.

Question 9, if approved by voters Nov. 5 and again in 2004, would allow
people age 21 and older to possess up to 3 ounces of the drug. Driving
under the influence of the drug, use in public and use by those younger
than 21 would be prohibited.

R. Keith Schwer of the Center of Business and Economic Research said the
study did not take into consideration that marijuana is an illegal
substance banned under federal law.

Law enforcement authorities have said that because of the federal law,
Nevada could not sell or tax the sale of marijuana.

Schwer said the study was done at the request of Nevadans for Responsible
Law Enforcement, the organization that gathered signatures from 110,000
residents to put Question 9 on the general election ballot. The
organization paid $5,000 for the study.

"This had nothing to do with the center's view on marijuana," Schwer said.
"People who vote on this issue should know what we found."

Billy Rogers, leader of Nevadans for Responsible Law Enforcement, had
estimated 150,000 regular marijuana users were in the state. Rogers said
Tuesday that the earlier estimate of 110,000 to 150,000 regular users
included juveniles. He said Schwer is being conservative in his estimate of
users.

"I thought they were extremely careful in their study," Rogers said.
"Twenty-eight million dollars would buy a lot of textbooks for children,
and it certainly would help fund education."

Question 9 calls for the state Legislature to devise regulations "for the
cultivation, taxation, sale and distribution" of marijuana to adults.
Marijuana would be bought from state licensed stores.

The tax rate, set in the ballot initiative, would be the same as the tax
for tobacco products. The UNLV center based the average retail price for
marijuana at $250 per ounce. At that rate, the state would reap annual
marijuana taxes of $22.1 million and $6.5 million in additional sales
taxes, according to the report.

A marijuana tax could not be levied before 2005, when the Legislature would
meet to vote on regulations.

Legislative Counsel Brenda Erdoes said the state has a marijuana tax of
$250 per gram that allows the state to cash in when large amounts of
marijuana are confiscated from drug dealers. The tax brings in less than
$2,000 a year.

"The constitution does not prohibit the state from doing something like
that (enacting a new marijuana tax)," Erdoes said. "But the enforcement of
federal law might be a problem."

In coming up with 75,000 marijuana users, Schwer counted tourists as 10
percent of the users.

Language in the ballot question does not deny marijuana to visitors. It
says only that persons older than 21 can possess the drug without fear of
arrest. But another section in the question prohibits people from
transporting marijuana in or out of Nevada.