First Decriminalization, Then Legalization, Then Taxation?

Yesterday California Governor Arnold Schwarzenegger signed a bill decriminalizing the possession of less than an ounce of marijuana in California.  The new law takes effect in January.  Thereafter, possession of an ounce or less will be a simple infraction punishable by a maximum $100 fine.

Interestingly, Schwarzenegger justified his signing of the bill solely on cost grounds.  He says California will save money on prosecutors, court personnel, police officers, and publicly provided defense attorneys who otherwise would be paid to prosecute marijuana possession misdemeanor offenses.  In 2008, for example, California had 61,000 arrests on misdemeanor possession charges.

California’s decision to decriminalize small quantities of marijuana is an interim step in the process that I think is probably inevitable.  Eventually cash-strapped states will find the lure of legalizing marijuana, and then taxing its sale, to be irresistible.  California faces a massive budget deficit.  By decriminalizing the possession of marijuana, California eliminates an expense item.  By legalizing marijuana and taxing its sale, California adds money to its revenue side.  With states having justified the legalization of casino gambling on job creation and revenue grounds, can legalized marijuana be far behind?

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