Although recreational marijuana legalization based on voter initiative has not yet been finalized, businessmen are optimistic about the potential of big marijuana money in California. According to speculation, the Adult Use of Marijuana Act (AUMA), if approved in November, would create significant new business opportunities as well as revenue in the form of taxes.
In an official statement, Secretary of State Alex Padilla announced an excise tax on retail sales of marijuana equal to 15% of sale prices, and state cultivation taxes on marijuana of $9.25 per ounce of flowers and $2.75 per ounce of leaves.
Following Canada’s lead, the promotion of legalizing recreational marijuana has gained momentum in the US. Just like the five other prominent US states; Colorado, Washington, Oregon and Alaska and the District of Columbia, California is pushing hard for the final ballot on 28th June.
The Adult Use of Marijuana Act (AUMA) 2016 is a voter-based initiative aimed at legalizing, controlling, regulating and imposing taxes on marijuana. The group announced it had collected over 600,000 signatures for the proposal, more than enough for the 2016 ballot and that their move was certified by the Secretary of State for the November ballot.
According to Reuters, a similar ballot-based initiative, started by Californians in 2010, failed to gain success, however today the concept of marijuana legalization seems more realistic due to strong support from prominent mainstream leaders including former Facebook President Sean Parker and California Lt Gov Gavin Newsom.
If approved, the initiative would allow all 21–year olds and above to possess, transport and use up to an ounce of cannabis for recreational purposes. Moreover, according to Governing, it would allow individuals to grow as many as six marijuana plants.
Although legalization seems like a long shot, many investors are financing pot businesses e.g., according to Reuters, former Phoenix Suns NBA basketball star Kevin Johnson recently founded a marijuana investment company in collaboration with Truth Enterprises. Johnson, a firm believer of the flourishing marijuana industry, told Reuters he sees the legalization and normalization of marijuana as ‘inevitable’. According to Johnson, the pot industry will gain a worth of $4 billion by 2020, making it a “chance not just to build companies but to build an industry.”
Similarly, Leslie Bocskor, who advises and invests in marijuana-related businesses, says, “I don’t believe there will be any precedent in the United States that can compare to it except for maybe the Gold Rush.”
Furthermore, according to the International Business Times, opposition groups in California are keen to gather contributions from police associations, prison guard groups and the Teamsters union.
California has a population of nearly 40 million people and has one of the largest legal marijuana markets in the US. It has been speculated that if recreational pot usage is legalized in November, an estimated $1 billion in additional taxes per year would be generated.
However, despite all legalization efforts and decisions, the US government currently declares marijuana a dangerous drug with illegal distribution and sale of marijuana still considered a serious crime. According to the government, the Department of Justice (DOJ) is committed to enforcing the Controlled Substances Act (CSA).