September 9, 2009
Pursuant to Elections Code Section 9005, we have
reviewed the proposed statutory initiative related to the use,
possession, and sale of marijuana (A.G. File No. 09‑0024, Amdt. #1-S).
Federal Law. Federal law classifies
marijuana as an illegal substance. The Federal Controlled Substances
Abuse Act provides criminal sanctions for various activities relating to
marijuana. Federal laws are enforced by federal law enforcement agencies
that may act independently or in conjunction with state and local law
State Law and Proposition 215.
Under current state law, the possession, use, transportation, or
cultivation of marijuana is generally illegal in California. Penalties
for marijuana-related activities vary depending on the offense. For
example, under the state Penal Code, possession of less than one ounce
of marijuana is a misdemeanor punishable by a fine, while selling
marijuana is a felony and may result in a prison sanction.
In November 1996, voters approved
Proposition 215, which legalized the cultivation and possession of
marijuana in California for medicinal purposes. Notwithstanding this
initiative, the U.S. Supreme Court ruled in 2005 that federal
authorities could continue to prosecute California patients and
providers engaged in the medicinal cultivation and use of marijuana for
violations of federal law. However, the U.S. Department of Justice
announced in March 2009 that it would no longer prosecute marijuana
patients and providers whose actions are consistent with state medical
This measure (1) legalizes various
marijuana-related activities, (2) allows local governments to regulate
these activities, (3) permits local governments to impose and collect
marijuana-related fees and taxes, and (4) authorizes various criminal
and civil penalties.
Legalization of Marijuana-Related
Activities. Under the measure, persons age 21 or older could
engage in "personal consumption" of marijuana. Specifically, personal
consumption of marijuana would be permitted in a "non-public place,"
defined as including a residence or a public establishment licensed for
on-site marijuana consumption. The measure states that persons generally
may (1) possess, process, or transport up to one ounce of marijuana; (2)
cultivate marijuana on private property in an area up to 25 square feet;
(3) possess harvested and living marijuana plants cultivated in such an
area; and (4) possess any items or equipment associated with the above
activities. However, the measure permits local authorities to authorize
the possession and cultivation, including commercial production, of
larger amounts of marijuana. Under the terms of this measure, the state
could also enact laws to allow larger amounts of marijuana, as well as
to enact new laws to regulate the commercial production of marijuana.
The measure prohibits state and local law enforcement agencies from
seizing or destroying marijuana that was possessed, used, or sold in
accordance with this measure.
This measure sets forth some limits on
marijuana-related activities. It states, for example, that possession of
marijuana must be solely for an individual's personal consumption and
not for sale, although sales are permitted to individuals in public
establishments licensed for marijuana consumption. The measure specifies
that smoking of marijuana in the presence of minors or the consumption
of marijuana by the operator of a motor vehicle is prohibited. In
addition, the measure states that it does not amend various existing
statutes related to marijuana, including laws that prohibit driving
under the influence of drugs or that prohibit possessing marijuana on
the grounds of elementary, middle, and high schools.
Local Government Regulation of Commercial
Production and Sale. The measure allows local governments to
adopt ordinances and regulations regarding the cultivation, processing,
distribution, transportation, sale, or possession for sale of marijuana.
For example, local governments would be permitted to license
establishments that could sell up to one ounce of marijuana per
transaction to persons 21 and older. The measure also authorizes local
governments to regulate the location, size, hours of operation, and
signs and displays of such establishments.
Individuals could transport marijuana from a
licensed marijuana establishment in one locality to a licensed
establishment in another locality, regardless of whether any localities
in between permitted the commercial production and sale of marijuana.
However, the measure does not permit the interstate or international
transportation of marijuana.
Imposition and Collection of Taxes and
Fees. The measure permits local governments to impose general,
excise, or transfer taxes, as well as benefit assessments and fees, on
authorized marijuana-related activities. It specifies that the purpose
of such taxes, assessments, and fees is to allow local governments to
raise revenue or to offset any costs associated with marijuana
regulation. The measure requires that licensed marijuana establishments
pay all applicable federal, state, and local taxes and fees currently
imposed on other similar businesses.
Authorization of Criminal and Civil
Penalties. Under the measure, any individual licensed to engage
in an authorized marijuana activity who negligently gives or sells (or
offers to give or sell) marijuana to a person under 21 would be banned
from owning, operating, or being employed by a licensed marijuana
establishment for one year. In addition, the measure specifies that
persons age 21 or older who knowingly give (or offer to give) marijuana
to persons age 18 through 20 could be sent to county jail for up to six
months and fined up to $1,000 per offense. The measure does not change
existing criminal statutes involving penalties for furnishing marijuana
to minors under the age of 18. Local governments could impose additional
penalties or civil fines on certain marijuana activities that were
inconsistent with the terms of this measure.
The measure states that no individual could be
punished, fined, or discriminated against for engaging in any conduct
permitted by the measure. However, it does specify that employers would
retain existing rights to address on-the-job consumption of marijuana
that affects an employee's job performance.
Although the federal government recently
announced that it would no longer prosecute medical marijuana patients
and providers whose actions are consistent with Proposition 215, it has
continued to enforce its prohibitions on non-medical marijuana
activities. To the extent that the federal government continued to
enforce existing federal marijuana laws, it would generally have the
effect of impeding or eliminating the cultivation, possession,
transportation, sale, or use of marijuana permitted by this measure
under state law.
Thus, the revenues or expenditures resulting from
this measure would be subject to significant uncertainty. The measure
could have the following fiscal effects discussed below.
Reduction in State and Local Correctional
Costs. The measure could result in significant savings to state
and local governments, potentially up to several tens of millions of
dollars annually, by reducing the number of marijuana offenders
incarcerated in state prisons and county jails. It could also reduce the
number of persons placed on county probation or state parole. The county
jail savings would be offset to the extent that jail beds no longer
needed for marijuana offenders were used for other criminals who are now
being released early because of a lack of jail space.
Redirection of Court and Law Enforcement
Resources. The measure could result in a major reduction in
state and local costs for enforcement of marijuana-related offenses and
the handling of related criminal cases in the court system. However, it
is likely that state and local governments would redirect some or all of
their resources to other law enforcement and court activities, reducing
or perhaps eliminating the savings that could otherwise be realized.
Potential Effects on Substance Abuse
Program Costs. The measure could result in an increase in the
consumption of marijuana, potentially resulting in an unknown increase
in the number of individuals seeking publicly funded substance abuse
treatment services. For example, the state Drug Medi-Cal Program could
incur increased costs of a few million dollars annually. This measure
could also have fiscal effects on state- and locally funded drug
treatment programs for criminal offenders, such as drug courts. For
example, the measure might reduce spending on mandatory treatment for
some criminal offenders, or result in the redirection of these funds for
Potential Reduction in Medical Marijuana
Program. The measure could potentially reduce both the costs and
offsetting revenues of the state's Medical Marijuana Program, a patient
registry that identifies those individuals eligible under state law to
legally purchase and consume marijuana for medical purposes. That is
because some adults 21 and over would likely no longer participate in
the program to obtain marijuana.
Potential New Revenues From the
Legalization of Marijuana. State and local governments could
realize additional revenues from sales taxes generated by commercial
producers of marijuana. The state could also realize additional income
tax revenues from the production and sale of marijuana. In addition,
local governments could realize additional revenue from various types of
taxes, benefit assessments, and fees on marijuana. The actual level of
revenues generated would depend upon the rate of such levies and how the
measure changed the consumption and sales price of marijuana. Moreover,
the amount of all of the various revenues that could be generated under
this measure would depend considerably on the extent to which the
federal government enforces its laws against marijuana in California.
Effects on State and Local Fine Revenues.
The measure could reduce state and local revenues from the collection of
the fines established in current law for marijuana criminal offenders.
However, there could be additional fine revenue generated from the new
civil and criminal penalties for violators of the measure, such as for
selling marijuana commercially without authorization. The net fiscal
effect of these changes in fine revenues is unknown.
Summary of Fiscal Effects
Given that the federal government continues to
enforce federal marijuana laws that do not conflict with state medical
marijuana laws, the revenues and expenditures resulting from this
measure would be subject to significant uncertainty. We estimate that
this measure would have the following major fiscal effects:
Savings of up to several tens of millions of
dollars annually to state and local governments on the costs of
incarcerating and supervising certain marijuana offenders.
Unknown but potentially major tax, fee, and
benefit assessment revenues to state and local government related to
the production and sale of marijuana products.
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