The California Regulate, Control and Tax Cannabis Act: Part 1

A single joint of marijuana

If passed, the California act would legalize and tax recreational marijuana. Image from Flickr.

Yesterday evening, the California Secretary of State confirmed that the voter initiative to legalize marijuana received an estimated 523,531 valid signatures – well more than the 433,971 signatures needed to get on the November ballot. The California legalization initiative has supporters that argue pot legalization will not only save the cash-strapped California economy money, but will bring in the fast cash of tax revenue. Some detractors of the bill argue that legalizing the drug will lead to an increase in crime and health impacts. Other detractors worry that legalizing gray-market marijuana will decrease the quality of marijuana and significantly harm the budding marijuana industry. Part 1 of this article covers the Regulate, Control, and Tax Cannabis Act in California and the arguments for its passage. Part 2: Arguments against Marijuana Legalization in California covers the arguments against marijuana legalization in California.

History of marijuana legalization in California

In 1913, the first state law criminalizing marijuana in the United States was passed in California. Other states quickly followed suit. By 1937, federal law made possession or transfer of “Marihuana” illegal for everything except medical and industrial uses.

This act was declared unconstitutional in 1969, but the U.S. Federal government included marijuana in the Controlled Substances Act of 1970. In 1996, California legalized medical marijuana with Proposition 215, reigniting a national debate. On the federal level, marijuana remains an illegal Schedule I narcotic considered to have “no valid medical use.”

The California marijuana legalization measure

The California voter initiative to legalize pot, known as the Regulate, Control, and Tax Cannabis Act lays out several limitations on the legal use of marijuana. The initiative would allow anyone 21 or older to “possess, cultivate or transport marijuana for personal use.” Local governments throughout California would have the ability to tax and regulate commercial production or sale of marijuana. Individuals would also be prohibited from smoking marijuana in public, smoking marijuana while minors are present, providing to any underage person, possessing the drug on school grounds or driving while under the influence of marijuana.

The cost-savings argument for marijuana legalization

Supporters of the Regulate, Control and Tax Cannabis Act argue that the legalization of marijuana would save the State of California a significant amount of money. California is currently in a huge budget deficit, and has been using payday cash advances on the state budget to cover costs.

Estimates for these savings range from $156 million to $1 billion. Supporters claim that once the already-stretched-thin law-enforcement system stops prosecuting individuals for growing, possessing or selling marijuana they can focus on crimes and criminals that are more violent or dangerous. Proponents also point out that while very few deaths in California can be attributed to marijuana, alcohol contributes to hundreds of deaths each year.

The taxation argument for cannabis legalization

In addition to saving the state of California millions of dollars in law enforcement, the Regulate, Control and Tax Cannabis Act also gives local governments the ability to tax marijuana. Proponents of the act estimate that $15 billion worth of gray-market and black market marijuana is sold each year in California.

An excise tax on the retail sales of marijuana would bring in an estimated $1.3 billion a year or more in revenue. Some counties and cities within California currently tax medical marijuana dispensaries. These city and county taxes bring in as much as $350,000 per dispensary.

The jobs argument for legalizing pot

Some areas of California, such as Humboldt County, already have a thriving marijuana tourism industry. With services from medical marijuana dispensaries to schools focused on how to grow marijuana, the area brings in several million dollars a year in tourism revenue. Supporters of legalizing cannabis point out that if the marijuana tourism industry in California grows to just one-third the size of the wine industry, it would create more than 50,000 jobs. If marijuana were legalized, it would also become legal to produce hemp in the state, which could add to the agricultural base of California.

California’s Regulate, Control, and Tax Cannabis Act is due to go on the November ballot. To see the arguments against the legalization of marijuana in California, see Part 2: Arguments against Marijuana Legalization in California.


Business Week
Seattle Times
Time Magazine
California NORML

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