MARIJUANA INITIATIVE: ECONOMIC BENEFITS TOUTED

Legalization Could Make Millions For State, Supporter Says

CARSON CITY -- The leader of the drive to permit adult Nevadans to legally
possess marijuana said Friday the state could reap untold millions of
dollars by selling and taxing marijuana.

Billy Rogers, spokesman for Nevadans for Responsible Law Enforcement, said
his group has commissioned a study to determine how much the state might
receive if it grew marijuana and sold it in stores like the ones Utah uses
for liquor sales. Other options for the cultivation and sale also are being
studied. Results are expected in late September.

"We are talking millions and millions of dollars of tax revenue," Rogers
said. "We figure there are 150,000 regular marijuana users in Nevada who
might buy an ounce per month."

Rogers' group circulated petitions to place Question 9 on November election
ballots. Voters will be asked whether to amend the state constitution and
allow the possession of 3 ounces or less of marijuana by adults. Police
would not be able to interfere with adults who use such amounts privately.

While the legal marijuana portions of the initiative have drawn national
attention, portions about selling and taxing marijuana have received little
discussion.

The initiative, if approved by voters this fall and again in 2004, would
force the Legislature in 2005 to set up a system to regulate "the
cultivation, taxation, sale and distribution of marijuana" to adult
Nevadans. The initiative even states the tax rate on marijuana will be the
same as the rate - now 37 percent - for chewing tobacco and cigars.

Earlier this week, an analyst for the Governor's Task Force on Tax Policy
estimated the state needs an additional $4.6 billion in the next 10 years
to continue state services at current levels.

Rogers predicted the potential economic benefits from the state sale of
marijuana will appeal to voters.

"Any time you find a revenue source that can help fund education and other
programs, the implications are attractive to voters," he said. "Obviously,
people in Nevada will look favorably on it."

A former political consultant from Texas, Rogers said he does not know how
much marijuana costs on the black market "since I don't smoke it."
Estimates are an ounce costs $100 to $300.

At $300 an ounce, 150,000 users who buy an ounce a month would pay $16.6
million a month in taxes, or about $200 million a year.

Greg Bortolin, spokesman for Gov. Kenny Guinn, said the governor is not
taking a position on Question 9. He added it is too early to discuss the
potential benefits from legal marijuana when voters have not approved the
ballot question even once.

"The governor is waiting to see how the people vote on this," Bortolin
said. "We are early in the ballgame."

Don Henderson, acting director of the Department of Agriculture, said his
agency has not looked into the costs of having the state grow marijuana for
sale.

During legislative hearings last year, the Agriculture Department put a
$750,000 price tag on setting up a farm to grow marijuana for people with
medical problems. The plan called for the drug to be grown at the state
agricultural farm at the University of Nevada, Reno.

That cost was considered prohibitive, and eventually the Legislature
approved a medical marijuana plan that allows qualified users to grow as
many as seven marijuana plants. About 200 people now have permission to
grow marijuana for medical purposes.

The secretary of state's office hopes early next week to complete the
ballot language for Question 9. The office must prepare pro and con
arguments and an explanation of the initiative.

Deputy Attorney General Kateri Cavin, who advises the secretary of state,
said her analysis of the initiative is that with voter passage, the
Legislature must regulate the cultivation, sale, taxation and distribution
of marijuana. Initially, some people thought marijuana would be grown for
sale only to people authorized to use it for medical purposes.

"We think it applies to the entire section (all users over 21), not just to
medical people," Cavin said. "Of course, this could go to court and be
challenged."

Rogers added it has been his group's intention to have the state regulate
and tax marijuana used by adults in Nevada.

Nevadans for Responsible Law Enforcement is a subsidiary of the Medical
Marijuana Project of Washington, D.C. The organization has argued the
public would be better served if police concentrated on major crime, rather
than arresting people for small amounts of marijuana. Rogers serves as
director of state policies for the marijuana project.

The project was formed in 1995 in part because of statistics that show an
increasing number of arrests for marijuana possession. According to FBI
statistics, marijuana arrests climbed to almost 750,000 in 2000, more than
double the 300,000 arrests in 1991.

In Nevada, the number of people arrested for marijuana possession in 1999
was 5,406, up from 2,076 in 1995. Under the ballot question, use of
marijuana by minors would remain illegal. Rogers predicted a state system
of regulation and distribution of marijuana would result in less marijuana
being available to minors.

With state control of sales, Rogers predicted the black market that now
provides marijuana for adults and juveniles alike will dry up. Fewer drug
dealers would be around to sell to minors, and state-run stores would check
identification to ensure minors did not buy the drug.

"It is like with alcohol and Prohibition," he said. "Once alcohol use
became legal, it wiped out the black market. It took organized crime out of
the liquor business. That is what happens when you move to a regulated market."