BizJournals Portfolio
Mar 25 2010 11:12am EDT

Californians to Vote on Legal Pot

California voters are going to get a chance to legalize marijuana this November, a move that further legitimizes the booming business of growing and selling pot in the open.

The state already leads the nation in number of medical-marijuana dispensaries, an industry created when California voters approved them in 1996. Some California cities, including San Francisco and Oakland, practically decriminalized possession of small amounts of marijuana. These cities deem possession as the lowest priority for local police.

The ballot issue will ask voters to allow Californians to legally possess up to 1 ounce of marijuana. They would also be able to grow small amounts in their own gardens.

Medical marijuana is a thriving business in the Golden State, doing at least $2 billion a year in business, according to one estimate. There are around 2,000 dispensaries, though that number will come down after Los Angeles passed a law limiting their number. When California Assemblyman Tom Ammiano tried to push his own legalization bill through the legislature last year, he estimated the state would raise $1.4 billion a year in extra revenue by taxing legal pot. That's based on sales estimates for legal and illegal pot of $14 billion to $15 billion a year.

Ammiano's bill stalled, but state officials said Wednesday that a proposed ballot initiative had enough signatures to go ahead with a public vote.

The business of marijuana has had a spinoff effect for business districts and local governments. Oakland taxes medical marijuana and a once-rundown neighborhood near downtown has seen a resurgence with coffee shops, gift stores, and other businesses opening up near four medical-marijuana dispensaries. There's even a for-profit school to help people grow the best pot and understand the laws.

Other areas of the country have seen cottage industries form around medical marijuana. In Denver, marijuana dispensaries outnumber Starbucks locations. Fifteen states so far have legalized medical marijuana, and others, including Rhode Island, are considering legalizing it for everyone. An effort to legalize in Washington state recently failed.

Passage in California isn't a given. A poll taken last year showed 56 percent were in favor of legalizing and taxing marijuana, but this week's official announcement will be a call to arms for antidrug groups. And California already has a reputation for allowing anyone with a doctor's note to get medical marijuana.

When New Jersey passed its own medical-marijuana measure in January, Assemblyman Reed Gusciora made a point of saying the law would be nothing like California's, which he viewed as lax on determining who receives prescriptions.

"We looked at the pitfalls of California and made a more restrictive bill," he said at the time.


Brett Chase covers health care for Portfolio.com and writes the blog Heavy Doses.

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