It's hard to find a statistic that would better illustrate the dismal failure of drug prohibition as a policy. If you get caught growing lots of marijuana, you'll go to prison. If you get caught growing lots of corn, you'll receive huge government subsidies. And yet, the prohibition has managed to artificially boost marijuana prices so much that growing pot is still much more profitable than growing corn.
In California, the value of marijuana production ($14 billion) is five times larger than the value of grape production. (Side note: if you say anything about medical marijuana being the cause of this, explain why pot is the largest crop in such liberal states as Kentucky, West Virginia, South Carolina, or Tennessee.) Now legalizing and taxing marijuana sales would surely decrease the value of those sales significantly--but it would still add a large source of revenue to the most troubled state budget in the Union. And yet, because of the drug prohibition hysteria, California government would rather violate the Constitution and issue its own devalued currency (in the form of IOUs) before even considering such an obvious measure.
You say:
ReplyDelete"Now legalizing and taxing marijuana sales would surely decrease the value of those sales significantly--"
Do you think the the same amount of sales would occur at a lower price each, or that some current smokers wouldn't find it as appealing, and that demand would drop?
To answer this I'd need to know the current structure of those sales, which I don't (i.e. how much of the harvest is sold to individual consumers as opposed to, say, in bulk to dealers in Alaska or Canada). On the assumption that most of it gets sold to individual consumers in California, I think legalizing would increase the number of sales. Lowering price increases demand, and the current risk premium is so huge that legal marijuana, even after taxation, would be much cheaper than it is now.
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