Rebecca Cathcart, writing in today’s NYT about Gov. Schwarzenegger calling for a study of legalizing marijuana in California, says:

Sales could raise $1.2 billion to $1.34 billion in annual tax revenue, some estimates say.

But that would be little salve for the state’s deficit, which could reach $20 billion in 15 months if ballot initiatives proposed by the governor do not pass….

But surely the economic consequences of legalizing marijuana are more complex that just straight tax revenue on direct sales. Two consequences that come immediately to mind:

This is why the governor is acting sensibly (for once) in calling for a study.


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