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Marijuana: prescription for an ailing economy?

By | February 12, 2012, 5:43 PM PST

Over 15 states have legalized medical marijuana, but the stigma surrounding the drug’s use in medicine has been hard to shake.

The debate may continue for years, but according to the New York Times, one thing seems sure: the industry is working wonders on local economies.

For many cities struggling to balance budgets in an increasingly downtrodden economy, the taxation of medical marijuana has been a key way to generate revenue. In Oakland, taxes on cannabis dispensaries last year totaled over $1.4 million—a number so significant to the city’s economy that Oakland now plans to double the number of dispensaries it licenses.

Michael Cooper reports:

“This is general fund revenue — it all goes into the melting pot,” said David McPherson, the city’s [Oakland’s] tax and revenue administrator. “When you’re making decisions about what to continue keeping or not, it goes into that decision process. If you don’t have that money, then you’re making other decisions about ‘Are we going to close the libraries on Monday?’ ‘Are you going to end up cutting a cop?’ ‘Are you not giving funds to our arts and things that help our kids?’”

Sometimes lost in the discussion of medical marijuana is the extent to which it has become a small but growing source of new tax collections for cities and states that have been struggling to balance their budgets for more than four years now.

Cities in Colorado have experienced similar gains with taxation of medical marijuana. Last year Colorado Springs brought in $700,000 after taxing dispensaries and Denver collected over $3.4 million.

The economic boost adds another factor to the complex debate over medical marijuana. Will the financial success of cities like Oakland and Denver change the nature of the argument?

Cities Turn to a Crop for Cash - Medical Marijuana [via New York Times]

Image: Dank Depot/Flickr

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Sarah Korones

About Sarah Korones

Sarah Korones was a contributing editor for SmartPlanet from 2012 to 2013.

Sarah Korones

Sarah Korones

Contributing Editor

Sarah Korones is a freelance writer based in New York. She has written for Psychology Today and Boston's Weekly Dig. She holds a degree from Tufts University.

Follow her on Twitter.

Sarah Korones

Sarah Korones

Sarah Korones does not have financial holdings that would influence how or what she covers.

She writes for SmartPlanet and is not an employee of CBS.

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+1 Vote
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Jesus said...
Jesus said to do unto others as we would have them to do unto us. None of us would want our child or grandchild thrown in jail with the sexual predators over marijuana. None of us would want to see an older family member???s home confiscated and sold by the police for growing a couple of marijuana plants for their aches and pains.
If the people who want to use marijuana could grow a few plants in their own back yards, it would be about as valuable as home-grown tomatoes; it would put the drug gangs out of business and get them out of our neighborhoods.
Posted by ConservativeChristian
12th Feb 2012
+5 Votes
+ -
Legalize cannabis
Tax it like wine, I'd rather have a store clerk checking I.D.s then a dealer on the corner selling to teenagers. Taking in a little tax money is better than spending billions on a war that can't be won.
Posted by silverfoxx129@...
12th Feb 2012
+5 Votes
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The Whole World is Watching
The whole world watches while we pepper-spray, taser and cudgel our own citizens for exercising their birth-right to assemble peacefully; The whole world watches while we strip-search and anally probe our own wheelchair-bound great grandmothers on suspicion of being terrorists; The whole world watches while heavily armed & masked government thugs break into our homes to ridicule, bully, threaten and murder us for using or growing a medically efficacious weed.

The prohibitionist model is one of blind ignorance, abject failure and economic collapse. Its underlying ideology is one of fear, envy, greed and hate.
Never have so many been endangered and impoverished by so few, so quickly!

* Do you wish to greatly reduce, even almost eliminate the market in illegal narcotics? Then please help us to dismantle Prohibition enabling us to Legalize, Regulate and Tax!

* Do you wish to bring about an enormous reduction in the presence and influence of organized crime? Then please help us to dismantle Prohibition enabling us to Legalize, Regulate and Tax!

* Do you wish to reduce harm to the existing users and addicts - who may be your children, brothers, sisters, parents or neighbors - by allowing them safe and controlled legal access, which will greatly minimize the possibility of 'peer-initiation' and sales to minors? Then please help us to dismantle Prohibition enabling us to Legalize, Regulate and Tax!

* Do you wish to see a reduction in the number of users or addicts, thus greatly curtailing drug related illness and deaths, while also reducing societal harm from problematic abusers? Then please help us to dismantle Prohibition enabling us to Legalize, Regulate and Tax!

Three simple questions for the unconscionable employees of the DEA, CIA & DOD: How much is that fence going to cost? How much is it actually going to stop? Won any good wars lately?
Posted by malcolmkyle
13th Feb 2012
0 Votes
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marijuana
Would you all please do a little research? Cities and states can't tax marijuana sales or the income from marijuana businesses. To do so would be participating in the proceeds of illegal drug trafficking. Any tax revenues raised can be seized by the federal government just as they seize rents from properties (or the properties themselves) used in marijuana businesses.
Posted by Spiderwoman71
13th Feb 2012
+2 Votes
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it's more appropriate that you do the research...
...start with the "California Board of Equalization" +"betty yee" +marijuana then come back and tell us about the nearly 1/4 of a billion in sales tax collected by the California Board of Equalization in 2010 and 2011. I'm always surprised when I hear someone say that the proceeds of crime can't be taxed. Haven't you ever heard of Al Capone?

Making income tax free is used as a reward for certain behaviors. The assertion that lawmakers want to reward breaking the law is positively laughable. I know, I know, people are always saying that criminal income is tax free. It's only tax free if the criminal commits income tax evasion.
Posted by Duncan20903
13th Feb 2012
0 Votes
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If...
If all the people presently addicted to alcohol were switched to pot, they'd become much more productive members of society, and we'd have much less automobile mishaps. How ironic that the former is still outlawed in 35 states and the latter is sold on every street corner.
Posted by omb00900@...
13th Feb 2012
+3 Votes
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Impaired is impaired
The "we can't legalize pot because people would just drive stoned" argument is total BS. The benefits of legalization greatly outweigh any benefits of what we now have.
Prosecute impaired driving. That means drunk (not neccessarily drinking), stoned, talking on a phone, texting, eating, or sometimes being in a conversation! All too often we drive on "auto-pilot".

I won't even make the joke of how many fatal 10 MPH car crashes can happen.
Posted by harrim47
Updated - 13th Feb 2012
+1 Vote
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Addiction
I think that an alcoholic would still be an alcoholic using another drug. I have not heard that pot has the quality to reduce addiction to another drug. I am in favor of ending the prohibition on drugs and to take the stigma out of the medical use of pot for appropriate diseases. Marijuana has clinical and anectodotal stories of being helpful, but it needs to be properly tested for both effectiveness and side effects; none of the tests that have been published have been shown to be unbiased. Also, the tests need to use marijuana instead of a chemical form of one of the active substances. A well designed study that shows a medical advantage to marijuana should be enough evidence in favor of removing marijuana from the schedule of non-medical narcotic drugs by congress.
Posted by sboverie
13th Feb 2012
+1 Vote
+ -
Legalize IT!!!
Let people use weed if they want to. There is nothing wrong with it
Posted by skycap71
13th Feb 2012
+1 Vote
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marijuana
To deny some one on chemo the use of THC,because it is not a necessity is to me the moral equivalent of telling some one who is sea sick that they can not have Dramamine, because it is not a necessity and may make them drowsy.
Posted by gastonlw@...
13th Feb 2012
0 Votes
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OMG!
How many times does this need to be analyzed?? Only those in authority who think they know are telling everyone else what to do even though folks have using for decades, driving on roads, working on the job, in the school's, etc...again for decades, YES there are some constraints needed!! Like its difficult to learn new things while using...too much, like booze can be detremental, severe chronic use may lead to depression in some people, Yeah make revenue! ! We need it!! folks are going to use anyway always have been.
Posted by junietoons
15th Feb 2012
+1 Vote
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Yes, legalize
The underground economy for pot has been estimated to be over $35B, more than corn and wheat combined. And, it's been estimated it could bring in more than $6B in taxes annually. These figures from studies done a couple of years ago. What more does it take to look at this rationally?!

The bottom line is the politicians are afraid their constituents will think badly of them and not get re-elected. Pot will always be around and, like alcohol, is better regulated and taxed. It would be safer and the cost would most likely come down. It's already been studied to death and the results are consistent: less addictive and damaging than cigarettes, beer, booze and pills; all (in some cases, unbelievably) legal. And like these substances, using them responsibly just makes sense. It's just like eating more-dangerous McDonald's BS "food" which could kill you quickly if eaten every day. If anyone is predisposed to abusing any substance, they'll need more assistance, anyway. And, anecdotally, when's the last time you saw a headline reading, "Stoned Man Descends on Mall with Five Automatic Weapons, Kills Millions"? You smoke too much, you fall asleep after eating too many pieces of pizza.

Let's approach this like rational adults - as much as we can - and stop messing around with the politics.
Posted by Lucky2BHere
Updated - 15th Feb 2012
+1 Vote
+ -
Objectivity
It's very easy to be objective when there are no horses in the game.

I'm not sure who uses Google's Chrome browser, but a simple ""Cost of Drug War" in the omnibox brings up a figure of 1 Trillion dollars spent over the last forty years on the drug war. I don't want to even begin speculating on how much is spent enabling the continuation of the drug war (e.g. the CIA trafficking drugs into the country via airplane [read an article and watched a video about this a while ago...pretty nasty stuff]).

If drugs are legalized (as they've been for the majority of the existence of the United States; referring to hemp-growth requirements for land ownership in the very early days of the country) there are many people in authority who lose a source of income...whether it is through direct involvement in the ultimately criminal activity, or simply a job (the DEA has employees that would be without jobs if the DEA were non-existent).

Banging our heads against a stone wall with arguments about the efficacy of marijuana, or the ineffectiveness of the drug war at large may lead to temporary relief to know that we are not alone in these realizations, but common sense would dictate that we are ultimately NOT under a government by the people and for the people...we are under a government that is not the government WE elect. It is very simple.

So, folks, I say: find your drug of choice, purchase from a trusted black market dealer (the only true free market left...think about it), sit back, and enjoy the show...

You could always get up and do something, but at this point, the politics of the country incite so much clever division, that Rs and Ds don't believe they're in the same alphabet.

Live well, folks!
Posted by GSystems
15th Feb 2012
0 Votes
+ -
Why Marijuana Will Never be Legalized!
This thoroughly documented expose shows quite clearly how the Australian government is directly involved in drug trafficking and what methods it uses to cover up its involvement.
Duration about 1.5hrs.
http://www.expendable.tv/p/view-expendable.html
Posted by kwickset@...
17th Feb 2012
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