If Marijuana was Legalized, Prices Would 'Dramatically Drop,' Finds Report

Photo by Jaypeg21 via Flickr

Photo by Jaypeg21 via Flickr
One ounce of marijuana today is $375. If Californians vote for Prop 19 or if the state legislature and Governor approve AB 2254, the price could drop to $38 per ounce, says the RAND Corporation in a study released today. Called Altered State? Assessing How Marijuana Legalization in California Could Influence Marijuana Consumption and Public Budgets, the report examines the likely increase in usage, how much tax revenue could be generated and other issues.

One issue especially may be highly debated over the coming months. It's often said that legalizing marijuana will free the state from enforcing the drug. But RAND "estimates that the cost of enforcing the current laws probably totals less than $300 million." Whether that's true or not, it could become a focal point of the opposition.

Other findings incude the increase of usage, which could be 50 to 100% more than now, matching the 1970s. Despite that increase, researchers feel tax revenues will not blow away the charts.

“A fixed excise tax per ounce may give producers and users an incentive to shift to smaller quantities of higher-potency forms of marijuana,” said study co-author Jonathan P. Caulkins of Carnegie Mellon University. He said that kind of shift would be one factor that could lower revenues collected from marijuana taxes.

Even at current estimates, legalizing and taxing marijuana would not fix the state budget. That sort of notion is "offensively false" to Mark Kleiman, a UCLA Professor of Public Policy who said that on KPCC's Air Talk on Monday. Marijuana would bring in $1.4 billion to the state, according to a state analysis. That amount helps, but wouldn't fix the nearly $20 billion budget gap the state currently faces.

But one thing studies haven't addressed yet is the effect of tourism. How much of the country would flock to California to enjoy a legal smoke?