Legalizing Weed Could Save California Half A Billion Dollars A Year

According to California’s Legislative Analysis Office (LAO), cannabis legalization could net the chronically cash-strapped state up to half a billion dollars every year. The LAO, which takes no position on pending legislative proposals, released its fiscal analysis concerning the earliest legalization initiative to be filed for the 2016 ballot, the California Craft Cannabis initiative.


The LAO’s analysis predicts law enforcement savings up to or even in excess of $100 million annually, in addition to “several hundred millions of dollars” in taxes brought in at the state and local level — despite explicit language in the Craft initiative capping the taxes the state may charge. This is great news for a state with chronic fiscal woes, although with a looming shortfall of up to $16 billion, passage of the initiative will not solve the state’s fiscal crisis all by itself. But there’s no denying that the combined savings and extra taxes would be a big help.

As the LAO correctly points out, however, their predictions are subject to considerable uncertainty. Looming largest among the wild cards is the unknown response of the federal Department of Justice, which retains the authority to conduct raids and otherwise disrupt any state system of regulation and taxation. Current federal guidelines to US Attorneys urges prosecutors to refrain from bringing such actions within states which have “robust” systems to regulate cannabis industries according to federal priorities, but the US Attorney for the Northern District of California, Melinda Haag, has publicly stated that such guidelines will not affect her enforcement priorities. If the federal government persists in its campaign against California cannabis, it could potentially erase all fiscal benefits of the legalization initiative.

The Craft Initiative is the first but by no means the only ballot initiative aiming to legalize the adult use of cannabis in 2016; the leading initiative campaign, Reform California, expects to finalize the language of its proposed initiative this summer.

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