California pot consumption could double if legalised

If California legalises marijuana as two Bills are seeking to do, the price of the drug would plunge by 80 per cent while consumption would double, a new study released this week found.

The Rand Corporation study said "the untaxed retail price of high-quality marijuana could drop to as low as $38 an ounce compared to about $375 an ounce."

If the drug is made legal for non-medical consumption "even under a scenario with high taxes ($50 an ounce) and a moderate rate of tax evasion (25 per cent), researchers cannot rule out consumption increases of 50 per cent to 100 per cent, and possible even larger," the researchers found.

Using the drug for medical purposes has been legal for 14 years in the western state. But a new initiative that will appear on the ballot in November elections is seeking to legalise recreational marijuana use.

The Regulate, Control and Tax Cannabis Act of 2010 would let cities and counties adopt ordinances authorising the cultivation, transportation and sale of marijuana, and tax its sale just like it taxes alcohol and cigarettes.

Another Bill would allow people over 21 to legally grow on a small plot, and share, the drug. Cities and counties could tax it. Under the measure, people aged 21 and older could own up to one ounce (28 grams) of pot for personal use. Possessing an ounce or less of marijuana has been a misdemeanour with fines of $100 since 1975, when a law was passed that reduced tougher penalties.

It would also allow adults to grow up to two square meters of cannabis per residence or parcel.

Supporters are hoping the potential tax windfall will help garner support for the measure at a time when California is suffering from a crippling budget crisis.

Activists estimate that California could earn $1.5 billion in excise taxes, and save another billion dollars currently spent on law enforcement and prisons by legalising cannabis. They also point to earnings for marijuana-linked businesses.