Marijuana Reform and the State Budget

USA Today has a good article on the growing number of states reconsidering the prevailing criminal justice approach to curbing the medical and recreational use of marijuana. The issue seems to be nearing a tipping point, based in good part on generational momentum.

The argument state legislators seem to be finding most persuasive is relief for state budgets:

Now California's Legislature is considering a bill that would make it the first state to legalize marijuana for recreational use as well. It is unlikely to pass this year, but Gray and other advocates hope to have a proposition on the November ballot that would legalize marijuana use for anyone 21 or older. California would levy taxes that the state tax board says could raise $1.3 billion or more a year for the deficit-plagued state, while saving tens of millions in prison and law-enforcement costs. Sponsors of the ballot issue have turned in 690,161 signatures on petitions for verification, far more than the 433,971 valid signatures required to get on the ballot.

Obviously there are many factors that make California unique, and most states would not see the same amount of revenue. In fact it seems likely that professionalization of the trade would push the cost of marijuana below current street prices. But even a gain of half a billion dollars in revenue would be a huge relief for the state.

Apart from allowing states to collect taxes (at the high level of alcohol and cigarettes) there would presumably be several other fiscal benefits. For instance, the policy would place less of a burden on scarce law enforcement resources, and would decrease the prison population.

At a time when states are putting every possible revenue-raising strategy on the table to prevent draconian budget cuts, it seems to me that the state doesn't have anything to lose by skipping over the "medical" placeholder law and opting for a tax-and-regulate approach. What would happen if Pennsylvania became the first state in the country to tax and regulate marijuana for recreational use? Imagine the level of investment that would pour into the state, particularly in regions with great agricultural capacity.