Rand Corporation Predicts Plummet in Price of Cannabis

with the advent of legalization. Of course, if the state taxes cannabis, like alcohol, the money would go to the state, not just the supplier.

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The researchers said legalization could bring substantially more revenue if California sees an influx of "marijuana tourism" similar to Amsterdam, where pot is legally sold at coffee shops, and if out-of-state dealers purchase California cannabis to sell back home.

"You would certainly guess that if it's cheaper to produce it in California legally than to import it from Mexico, it would reduce imports from Mexico," Jonathan Caulkins, a Carnegie Mellon University who also worked on the study, said. "Presumably, it would decrease them a lot."

Yet intervention from the federal government, which classifies marijuana as an illegal drug, or regulations limiting marijuana sales to California residents, as is the case now with medical marijuana, easily could defeat dreams of tourists flocking to the coast on pot vacations, Caulkins noted.

Consumer prices for pot would rise to about $91 an ounce if local governments adopt that same $50 an ounce tax scheme following passage of the ballot measure - still substantially lower than what Californians pay now but high enough to create incentives for growers to sell the drug under the table to avoid paying the government duty.