By Peter Suderman
Poor potheads, rejoice: You have new research on your side. According to a new RAND Corporation study on California’s Proposition 19, a ballot measure that would lift legal restrictions on marijuana, legalizing pot could dramatically reduce its price. From the press release:
Legalizing the production and distribution of marijuana in California could cut the price of the drug by as much as 80 percent and increase consumption, according to a new study by the nonprofit RAND Corporation that examines many issues raised by proposals to legalize marijuana in the state...Based on an analysis of known production costs and surveys of the current price of marijuana, researchers suggest the untaxed retail price of high-quality marijuana could drop to as low as $38 per ounce compared to about $375 per ounce today.
What’s less clear is whether the tax revenues the measure’s supporters promise would materialize:
While the state Board of Equalization has estimated taxing legal marijuana could raise more than $1 billion in revenue, the RAND study cautions that any potential revenue could be dramatically higher or lower based on a number of factors, including the level of taxation, the amount of tax evasion and the response by the federal government...RAND researchers caution there are many factors that make it difficult to accurately estimate revenue that might be generated by any tax on legal marijuana. The higher the tax, the greater the incentives would be for a gray market in marijuana to develop, researchers say.