Legalization of Marijuana Bill in California
by on Aug.04, 2010, under LAMP
gmudotedu says:
In response to Anonymous (the one that posted Monday, Feb 23, 2009 at 2:22 a.m.), s/he said:
“2. If there is a $50 tax, god knows the black market is going to take advantage of that. If CA wants this plan to work they need to either create legal distribution outlets, or they need to let the free market run its course, but then they need to crack down on tax evaders. I doubt the CA can track down many small time dealers and so these dealers are going to reap the benefit off of this huge tax. I am a free market guy but if we are going to tax something so heavily, we need licensed or legal distribution outlets just like we use in the tobacco model. Otherwise, legitimate sales get swallowed by the black market.”
Once the marijuana market is commercialized and big business enters the picture, you will be looking at a market that is analogous to big tobacco. And most likely, the same companies which make tobacco a competitive market will be the same corporations that take up stock in making marijuana a competitive commodity.
In this case, you won’t have to worry about the black market. Sure, there will always be a black market for marijuana, as there is for ALL things, and perhaps the black market for marijuana will be much greater than any other product. but eventually the mainstream market for marijuana will be so big that the effects of the black market will be very manageable. I mean, if the music industry can still survive with the black market that exists within that industry, and the rising black markets for film and television aren’t drastically altering the way those industries operate, then I believe it is safe to assume that once marijuana becomes a major industry, the black market won’t affect it too much. Even if it accounts for 10% of all sales and the government loses out on that 10% of profit from taxes, they are still walking away with an estimated $990 million bonus to their budget.
And that’s just the initial projections based on sales of marijuana. once you factor in everything that comes with a systemic market, you’re looking at increased job opportunities, economic stimulus across different sectors… I mean, you’re looking at every type of job from farming to warehouse packaging, management, advertising, product research and development, legal structure, commercial real estate – you name it, it’s needed when a completely new, unprecedented product hits the market with a demand already in place.
So your run-of-the-mill backyard marijuana business, whether they’re growing 9 plants or 100 plants, will not be a major factor once the industry has had a chance to get its bearings in the financial world. plus, you have to figure that if someone is running a 100 plant business after marijuana has been legalized, there is a good chance that corporations will go after this person, shut them down, probably prosecute them, and we won’t have to rely as heavily on police drug enforcement divisions. it will be in the interest of the big businesses to find these people who are creating or working within the black market and put them out of business rather than relying on the government to do it for them, because every dollar the black market seller makes is a dollar out of the pockets of big business.
Yeah, I think that’s a more fair projection of the situation. The more I analyze this issue, the more I agree with Ammiano and the supporters of this bill. And that’s coming from someone who doesn’t plan on taking part in the marijuana market (well at least not as a consumer… I’d probably invest in a corporation or two if they had the proper infrastructure). There’s another aspect I over-looked: what happens when they companies goes public? Imagine having a marijuana company traded like Phillip Morris on the NYSE! this is pretty exciting stuff. There’s so much more to it than just $50 per ounce that the government stands to make.
Posted on: Tuesday, Feb. 24 2009 @ 2:00AM
