Timing is everything and, no doubt, Assemblyman Tom Ammiano hopes that in economically hard times Californians will be receptive to his legislation allowing marijuana to be sold and taxed.

Ammiano's proponents claim that taxing sales of cannabis will add more than a billion dollars to the state's revenues and that his legislation, Assembly Bill 390, will reduce the prison population and the cost of prosecuting marijuana offenders, saving an additional billion dollars. With his legislation, the San Francisco Democrat may hope to bring together a coalition of those eager to decriminalize marijuana, members of the public eager for a fix to California's budgetary crisis, and prison reformers.

Despite what seem like powerful arguments in its favor, Ammiano's bill has produced sharp criticisms. Critics argue that illegal drugs will always be cheaper than legal drugs because of a $50-an-ounce surcharge Ammiano proposes. He also wants to charge wholesalers $5,000 initially and $2,500 annually for the right to sell cannabis. Also, critics counter that the bill would not decrease California's overpopulated prisons because there are not that many imprisoned whose crimes are for marijuana possession, and that it would increase marijuana use among adults and children.

While adding a potentially large, new source of state revenue – especially if it does not come with the increased harm to public health – and substantially reducing prison costs are worthwhile goals, claims by those on both sides of the debate fail to win over those who have no strong opinion about the evils or benefits of marijuana. And, given the weaknesses of the arguments on both sides, it's difficult to say whether AB 390 will become law.

But airing the arguments for and against decriminalizing marijuana is worthwhile.

Ammiano's chief reason for legalizing and regulating marijuana is for the revenue it would generate for the state. According to Board of Equalization estimates, regulating marijuana could bring in about $1.3 billion a year in taxes and fees. Proponents of the bill are probably overstating the potential revenue. They analogize legalization of marijuana to legalization of alcohol and tobacco, which are easily regulated and taxed. Marijuana is different from good whiskey, wine and tobacco. Making good whiskey and wine and growing one's own tobacco are difficult. By comparison, marijuana is easy to grow, which would make it harder to regulate.

Critics of legalization contend that illegal marijuana will be cheaper than legal marijuana because of the taxes and fees. That ignores basic market principles: The price of illegal marijuana reflects the cost of doing business and the risk of being caught. Further, many buyers would be willing to pay a premium to deal with a legitimate business person, to know the quality of the marijuana and to avoid the hassle and danger of the illegal trade.

But, while legalizing alcohol drove bootleggers out of the business when Prohibition was lifted, illegal marijuana dealers would probably maintain some of their clientele, even if they had to reduce their prices. Unless the state creates a way to identify legal vs. illegal marijuana, the cost of doing business for illegal growers may come down as well because law enforcement may change priorities in light of legalization. Thus, California voters motivated by the hopes of a cash cow may be disappointed with the results of revenue generated by a legal marijuana crop.

The policing argument

Ammiano's argument that AB 390 would free police to pursue more serious crime has more merit. Laws against marijuana use seem especially troubling, given the large number of Americans who admit marijuana use, including two presidents and one U.S. Supreme Court justice. So, less-punitive attitudes toward drug offenders are favorable for several reasons. Long prison sentences for those involved with drugs have contributed to the bloated prison population, which is overwhelming the state budget. Drug penalties, for example, for possession with the intent to distribute may rival penalties for crimes that involve far greater risk to personal safety. Unlike alcohol use, marijuana use is not associated with violent crime.

Michael Vitiello is a professor and scholar and the director of the Center for Advocacy and Dispute Resolution at McGeorge School of Law, University of the Pacific.