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Prop 19: How Legalized Marijuana Could Affect California and the U.S.

For those of you who live in the golden state or are following its many developments, lest you fear you’ll let any of the state’s numerous debacles slip by unnoticed, you’ll know that November elections are closing fast upon California.  Furthermore, you’ll also likely know that the reason they’re so fascinating to watch this year is because on top of the usual boring budget and committee proposition, there’s one little proposition that, if it passes, may cause a sudden influx of California residency applications across the country.

Come November 2, if Prop 19 passes in California, possession of less than one ounce of marijuana will be legal in the state.  The proposition will essentially legalize recreational use of the drug.  However, as you saw in the link above, California voters are still split over the issue.  What will happen if it passes?  Aside from serving as the catalyst for one of the greatest parties in the world, there are a lot of sociological, economic, and legal ripples that Prop 19 will make across the sunshine state.

First, and most importantly, legalization will generate an incredible amount of revenue for the money-deficient California.  According to most estimates, passage of Prop 19 would mean the state would earn up to $1.3 billion a year in tax revenue, if not more.  Considering the fact that the medical marijuana industry accounts for California second largest cash crop at $14 billion dollars a year, that revenue estimate isn’t as crazy as it sounds.  If anything it’s probably a conservative one considering all the people who want to use marijuana now, but don’t because they don’t want to register publicly as a medical marijuana user.  All this added revenue will mean better equipment, training, facilities, and programs for public services.  Schools, police, firefighters, public housing and so forth, all stand to benefit monetarily from legalization.  Most importantly, passage of the proposition will help eat away at California’s current $19.1 billion budget deficit.

However, money aside, the more drastic and interesting aspects of legalization are the potential effects it may have on California, its residents, and the rest of the United States.

The most pronounced possible effect legalization will have is on drug culture itself.  The illegal marijuana market is made up of numerous suppliers that span from small growers here in the States to large scale Tony Montana style cartels originating from Mexico and the rest of the Americas.  There are also traffickers who transport the illegal goods to local drug kingpins and other small dealers across California.  It’s estimated that there are thousands upon thousands of people involve in the illegal marijuana trade.  The thought is that legalization could potentially eliminate all of this, since, like the end of prohibition, a legalized good can no longer sustain a black market.  And along with the end of this market will come an end to all the violence and deaths that once stemmed from the illegal marijuana trade.

However, the truth is that this effect may not be so concrete.  Like with the mob, the end of prohibition didn’t end their existence.  Instead, it forced the mob to move into other criminal areas or focus more on the ones they were already in.  Similarly, larger drug cartel function much like large corporations and like all good corporations, diversification is key to remaining successful.  Therefore the violence stemming from them likely won’t be curbed by much.  But where violence will decrease is for marijuana users here in the states who buy from local dealers.  Not only will they no longer have to deal with shady characters that may hurt and/or rip them off, the dealers themselves will have to become more reliable and kinder in order to stay in the game.  Either that or get a legal job or diversify like the larger cartels.

Furthermore, those convicted of marijuana possession now may be released.  However this would require legislators to apply the law retroactively, which may or may not happen.

But as wonderful as this speculation is, it may be all for nothing as the legal weed party may only be a brief one.  There are rumblings around the beltway that the federal government could sue California if Prop 19 passes.  Like Arizona’s recent reform to their state’s immigration law, if Prop 19 is found in the courts to be preempted by the federal government, the law may be repealed (much to the dismay of every Cheech & Chong fan in existence).

Though if the proposition passes, it could help spark a trend that may ripple across the U.S., North America, and potentially the international community, especially if it ultimately solves California’s budget crisis.  Who knows, soon pseudo celebrities everywhere may be able to check off one less item to be arrested for at the airport.

Ken LaMance

Comments

  • Jared

    “Instead, it forced the mob to move into other criminal areas or focus more on the ones they were already in. Similarly […] diversification is key to remaining successful. Therefore the violence stemming from them likely won’t be curbed by much.”

    I don’t think that your reasoning there quite justifies the conclusion. According to Senate testimony in 2010, the FBI and DEA confirm the estimate that 60% of cartel revenue stems from the marijuana trade. You’d have to admit that cutting the spending power of cartels by half would have an enormous impact on their operations. While I agree that they would move into other areas, it would be extremely difficult for them to recoup those losses.

  • Andrew Dat

    That’s an interesting point Jared. While I do see that the possibility of immediate reduction to violence could be possible in the short term, in the long term it’s likely that such violence will return to the same level prior to decriminalization (once such cartel finish moving into other black market goods, that is). Also in the grand scheme, though California serves as a major marijuana trafficking hub, Prop 19 is specific only to California. Other states where marijuana is illegal would still be viable areas to continue such sales.

    And lastly, from what I’ve read about drug cartels is that many of them, though diverse in illicit good choice, generally specialize in selling one primary drug as their main source of income. Therefore, another possible perspective to consider is a scenario in which a former marijuana cartel looking to recoup losses from decriminalization will likely be forced to move into another illegal good, which would mean moving in onto another rival cartel’s territory. Such an action could result in an escalation of violence.

  • Evan

    Could you send me some of the sources you used? It seems to me that the short-term period of lost revenue (if it is in fact short-term) could be devastating and drastically reduce incentive for people to involve themselves in illegal activity in the states. Also, it is my understanding that funding is critical to the evasion of law enforcement and so, at least in the short term, enforcement official may enjoy a period of increased effectiveness. I think the type of stop in momentum to illegal drug providers could have much longer consequences.

    Interesting article I thought, but would like to see your sources myself, particularly on the black market effects. Thanks.

  • Andrew Dat

    If you have access to Westlaw or LexisNexis check out a Buffalo Public Interest Law Review article titled “Is the End of the War in Sight: An Analysis of Canada’s Decriminalization.” There’s also an interesting article from the Daily Telegraph about dealers switching from dealing cocaine and other drugs and switching to fake prescription drugs. I don’t remember the title of that one. You can also check out a Wisconsin Law Review titled “Legalizing Marijuana: California’s Pot of Gold.” These are just a few, but search online to find more.

  • LordBKP

    Well if the numbers are correct or even close then pot should definatly be legal and taxed. Emagine that if California who suggests that the revenue would be 1.4 billion a year, revenue is profit right? Ok so they legalize it, the profit from the first year would go into a fund, at the end of the year divide every person who bought pot and paid the tax into that and send them a check for half, like the stimulus checks, then divide every other person living there that was born in the usa into the remaining balance and send them their checks everyone in California would be rich. After the first year the government then could use the profit to help its economy. What would Californias economy be like if no one was poor? At least those that were born in our great country? Then do that in all other states, what the hell, they can wait one year before taking the profits. 1.4 billion in profit, 40 million or so in population you do the math. after the first year the people wanting pot could even be able to afford it, how great would that be? No stealing to get pot money!!

  • Andrew Dat

    I agree with you LordBKP. More money for all!! Unfortunately, judging by the huge debt California is under we won’t be seeing any benevolent gestures coming from the state government any time soon…

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