Pubdate: Sun, 31 Mar 2013
Source: Herald, The (Everett, WA)
Copyright: 2013 The Daily Herald Co.
Contact:  http://www.heraldnet.com/
Details: http://www.mapinc.org/media/190
Author: Manuel Valdes, Associated Press

POT REVENUE OVERESTIMATED

The State's New Marijuana Adviser Says It Can Expect About $100
Million in the First Year, Not the $400 Million Initially Estimated.

SEATTLE - Estimates of how much money marijuana legalization can bring
to the state's coffers have been way off, Washington's new marijuana
consultant said.

In an interview with public affairs channel TVW aired Thursday, Mark
Kleiman said several factors, including competition from the loosely
regulated medical marijuana market, illegal sales and high prices for
legal pot are likely to affect the demand for the state-approved marijuana.

"It's entirely possible that by the time we finish regulating and
taxing this product, it's going to be uncompetitive with what you can
get at the collective gardens," he told Austin Jenkins for the show
"Inside Olympia."

Washington and Colorado last year became the first states to pass laws
legalizing the recreational use of marijuana and setting up systems of
state-licensed growers, processors and retail stores where adults 21
or older can walk in and buy up to an ounce of heavily taxed cannabis.
Sales could begin at the end of the year.

In 2011, efforts to regulate the medical marijuana market were vetoed
by thenGov. Chris Gregoire, who said among other reasons that she
didn't want state workers dealing with a drug still considered illegal
by the federal government.

Kleiman, a public policy professor at University of California, Los
Angeles, leads the Massachusetts based BOTEC Analysis Corp., which the
state picked this month to help with the legalization process. The
firm includes a former executive of the company that is the sole
licensed supplier of medical marijuana in the Netherlands.

It also includes researchers with RAND Corp. who will help figure out
how much marijuana state-licensed growers should produce. Kleiman said
he hopes to have that estimate ready within a couple of weeks.

Initial estimates said the state could bring in more than $400 million
a year from the marijuana market. But Kleiman said if the state sees
$100 million in revenue during the first fiscal year marijuana is
sold, it would be a good start.

"Price will be crucial because people who smoke a lot pay attention to
price," he said.

While acknowledging state lawmakers are looking for money to stabilize
the state budget, Kleiman said the process to launch the marijuana
market will take time. Even if The Washington Liquor Control Board
finishes its rule-making process on time in December, then it has to
issue licenses to grow marijuana. It takes four to five months for a
crop to mature. Marijuana probably won't hit the stores until late
2014 spring.

As legalization is rolled, Kleiman said he expects some occasional
users to increase their frequency over a long period of time.

Kleiman also said the state shouldn't have revenue goals for
marijuana.

"The only way to get a lot of revenue is to sell a lot of marijuana
and the only way to sell a lot of marijuana is to sell to people who
smoke a lot of marijuana and that's not a good thing," he said.
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