Bloomberg News

Let California Become U.S. Pot Bread Basket: Mark A.R. Kleiman

June 15, 2011

June 15 (Bloomberg) -- Californians are ready to make another run at the high life. Last year, the state’s voters came close to legalizing marijuana production and sales. Next year, with the legalization forces backed by more money, better organization and a younger presidential-year electorate, they’ll probably succeed. So drafting the marijuana ballot proposal is more than a symbolic exercise: Whatever goes on the ballot may well go into the law books.

Advocates of change in California confront one bedrock fact: They can’t repeal the federal laws making it illegal to grow, sell or even use cannabis. They can hope that change in California will create pressure for change in Washington, but whatever they ask voters to approve in November 2012 will have to work, at first, in the context of continued national prohibition. That rules out some otherwise attractive ideas. For example, Proposition 19, which came close to passage last year, sought to tax and regulate cannabis production and sale. But no grower or seller could have paid state taxes or filed California regulatory paperwork without confessing to a federal crime. That made the whole idea nonsense.

My preferred option would be legalization without commercialization. People who want to smoke pot should be allowed to grow their own, or to join small consumer-owned cooperatives that would grow it for them. That would avoid the risk of a massive increase in marijuana use -- and abuse -- fueled by the sort of mass marketing that now promotes alcohol abuse, nicotine addiction and bad eating habits. But California can’t establish that system while the current federal laws are in place; the federal government would call those co-ops criminal conspiracies.

Prohibition Repeal

That doesn’t render a new referendum pointless. The state now has, and enforces, its own criminal laws against cannabis. Voters could simply repeal those laws, much as New York repealed alcohol prohibition in 1923. (The 1920s-era federal Bureau of Prohibition, with only 400 agents, was utterly inadequate for policing alcohol sales; the fact that the federal Drug Enforcement Administration has 4,000 agents is one important difference between then and now.) That would mean abandoning the dream that legalization can plug California’s budget hole with more than a billion dollars in marijuana tax revenue. But that revenue, contingent on drug dealers’ willingness to expose themselves to federal prosecution, was always imaginary.

Lower Prices

Even the “clean repeal” that I prefer would be messy. Prices would drop steeply. Based on a RAND estimate that fully legal pot could be profitable at a tenth of today’s illicit prices, I estimate that repeal in California, leaving federal laws in place, would drive prices down by 50 percent to 75 percent. As with any commodity, lower prices would encourage greater consumption, so anything less than a doubling of cannabis use would count as a surprise.

How bad would that be? Actually, pretty bad. Most cannabis users smoke only occasionally, without damaging themselves or others. Increasing the number of occasional users wouldn’t be a significant social problem. But marijuana consumption is concentrated among a minority of heavy, habitual users; any growth in that population is undesirable. In addition, even in the face of an explicit ban on sales to minors, a big decrease in the price paid by adults would surely trickle down to youth. It’s hard to be indifferent to the risk of increased cannabis use among middle-school and high-school students; the younger someone starts smoking pot, the greater the risk of getting stuck in a bad habit. More smoking would also lead to more stoned driving. That’s not as dangerous as drunk driving, but it’s plenty dangerous enough.

Federal Enforcement

Under repeal, California could easily supplant Mexico as the primary source of marijuana for North America, leading to a price collapse and a surge in cannabis use nationwide. We couldn’t expect Washington to just stand back and let cheap California marijuana flood the national market. As California police stepped back, we’d probably see a surge in federal enforcement. With volume and sales rising, it’s likely that some of the resulting conflicts among growers and dealers, and between them and the law, would be violent; that’s the nature of large-scale criminal enterprise.

So repeal is no free lunch, but it’s still better than the status quo. We shouldn’t let familiarity blind us to the everyday horrors of current policy: $10 billion a year in revenue for criminals, including the drug-trafficking organizations that kill thousands of people per month in Mexico; 30,000 people behind bars for pot-dealing in the U.S.; and 750,000 marijuana possession arrests each year. Repeal in California couldn’t, by itself, change that. But it could help, reducing the heavy burden of state and local law enforcement and incarceration, and moving up the schedule for the national debate that, sooner or later, is surely coming.

(Mark Kleiman is Professor of Public Policy at the UCLA Luskin School of Public Affairs and the editor of the Journal of Drug Policy Analysis. The opinions expressed are his own.)

For more Bloomberg View op-eds: www.bloomberg.com/view/op-eds/

--Editors: Francis Wilkinson, Max Berley.

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To contact the writer on this story: markarkleiman@gmail.com.

To contact the editor on this story: Francis Wilkinson at fwilkinson1@bloomberg.net.


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