Happy New Year! January first is one of my favorite days of the year because even though it really is just another day, there is something about a new calendar that symbolizes new possibilities and a fresh start. Although many are still reeling from 2016 and some are destined to have buyer’s remorse over some of the votes they cast, I believe that even those that did not vote in favor of the Adult Use of Marijuana Act (Prop 64) will find themselves quite pleased with the numerous benefits they will begin to experience over the next few years as Prop 64 is rolled out.
I’ve discussed Prop 64 at length in previous posts here and here, but I wanted to take the time to thoroughly explain exactly what changes it will bring once implemented. This proposition was not created with a singular demographic in mind and California residents who do not partake in adult-use of cannabis will still experience significant benefits economically, within their communities and via criminal justice reform. Ultimately, the proposition is designed to benefit all Californians.
California’s economy, as it is, is massive. In fact, it’s the sixth largest economy in the world, beating out France. California truly is a nation-state with numerous booming industries, including technology, agriculture, aerospace, tourism and entertainment. Now legal medicinal and recreational cannabis will be folded into that diverse mix, which has the potential to bump the Golden State up the list in just a few short years.
It has been estimated that Prop 64 will contribute up to $1.57 billion annually to the state’s economy by 2018 – and this is on top of the $2.7 billion medicinal cannabis market. This growth comes from two new cannabis excise taxes, one for cultivation and one on retail price. Both taxes will be enforced when dispensaries are issued recreational permits, which will begin on January 1, 2018. Local governments, including counties and cities, will also be able to levy additional taxes on cannabis in order to compensate for additional security and officer training. Note that these tax percentages are only set for the next four years and will be adjusted for inflation starting in 2020.
Beyond the additional revenue for the state, Prop 64 is expected to bring another type of growth the California economy – job opportunities. In 2015 California created the most jobs of any state and more than the second- and third-most-populous states, Florida and Texas, combined and at a faster rate than any of the world’s developed economies. Adding the fastest growing industry in the U.S. to California’s economy will ensure that more jobs will continue to be created.
Revenue from these two taxes will be placed into the new “California Cannabis Tax Fund” and applied to a variety of programs, including:
- $2 million per year for research at the UC San Diego Center for Medical Cannabis Research;
- $10 million per year for 11 years for public California universities to research and evaluate the implementation and impact of Prop 64;
- $3 million per year for five years to the Department of the California Highway Patrol for developing protocols for determining drivers who are under the influence of cannabis;
- $10 million, increasing each year by $10 million until it reaches $50 million, for grants to local health departments and community-based nonprofits that support causes such as job placement, mental health treatment and substance use disorder treatment.
The remaining revenue generated by the taxes will go toward youth programs including drug education, prevention and treatment (60 percent), alleviating environmental damage from illegal cannabis producers (20 percent) and programs designed to reduce driving under the influence of cannabis (20 percent).
Prop 64 will dramatically reduce the resources (labor, time and money) enforcing the ineffective and misguided War on Drugs. Both police and prison spending will decrease due to less officers in the field “fighting” and less non-violent offenders incarcerated. Those currently incarcerated and those with a criminal record with cannabis charges will have the opportunity to have their case reviewed and potentially have felony charges dropped from their records. This creates a positive domino effect for our society. Not only does it decrease prison population and spending, but it also gives back opportunities to those who have been incarcerated due to the failed War on Drugs. This opens the door to more job opportunities, reinstates their right to vote and allows them to return to their families, all of which can enhance quality of life throughout the community.
Other states have had tremendous success with ending prohibition, which could be why Prop 64 received an overwhelming majority vote this election season. Many have worried that the results of the federal election may halt progress, but if the president-elect truly is a man of the people as he claims then he needs to listen to the 60 percent of U.S. citizens that believe cannabis should be legal. Until then, I am happy to be a part of a state that has proven to be a leader in promoting inclusion, progress and growth. I’m excited to see where Prop 64 takes us this year!
– Constance Finley