Cannabis Law Group's Medical Marijuana Legal Blog
California Estimates Big Tax Boost from Cannabis
Adult-use cannabis became legal in California Jan. 1 with Proposition 64 going into effect. Many cities and counties however have decided to maintain a ban on marijuana, and others did not have local regulations in place in time for the official roll out of the law.
But even after just a few weeks, the state government is already reaping big cash benefits reefer. Gov. Jerry Brown estimates $643 million in marijuana excise taxes in the first year, according to a Los Angeles Times report. Earlier projections estimated tax revenue could eventually hit $1 billion. Brown cautioned we don’t fully know every market issue that is at play, so local governments should be careful before enacting any sweeping measures.
Even as such, the lower estimates more than cover the $52 million California budgeted for 2017-2018 to establish and run the marijuana licensing system. The $643 million also does not include local sales taxes or state license fees. It costs businesses $1,000 for a license to sell cannabis. The fees are set to cover all costs associated with permits, including background checks, and resources necessary for processing and issuing. Continue reading
commercial sales. While the 
struggling with best practices and how to implement the laws quickly and correctly. It often falls to state departments, local legislatures, and other agencies to sort out licensing and sales practices.
There are a variety of reasons why people supported Proposition 64, otherwise known as the Adult Use of Marijuana Act. Some people realize that marijuana is not dangerous and there is no reason it should be outlawed. Other voters, do not necessarily love the idea of people smoking marijuana, but realize that it is going to happen regardless and this way we are not spending billions on a so-called war on drugs that is clearly not working. Not only was the state losing money on enforcement, the state was also losing money to the black market, as they were not able to tax marijuana. 
The state wanted to change the reputation that California is the Wild West in terms of marijuana laws and business, and they moved to create an agency to regulate medical marijuana. As this was occurring, Proposition 64 was passed by a majority of voters, making marijuana legal for recreational use as well as medicinal. 
However, his hands are currently tied in prosecuting those who grow, distribute, dispense, and possess for personal use any medical marijuana. The reason his hands are tied is because the Rohrabacher-Farr amendment was passed with bipartisan support in Congress and prohibits the U.S. Department of Justice (DOJ) from spending taxpayer dollars to prosecute medical marijuana in states where medical marijuana is legal. 
However, it should be noted that, while California is no longer the nation’s most progressive state with respect to legalization of marijuana, it should be noted that California is the nation’s leader by far in terms of revenue generated, and this is currently only including money generated by the sale of medical marijuana to approved patients. When recreational users can legally purchase cannabis products, the market is expected to grow even larger. 