The Ammiano bill[Ammiano_Bill_AB_390] proposes a fee of $50 on each ounce of marijuana sold. Is this reasonable? How does this compare to the cost per ounce of marijuana in a world without prohibition?
It takes no particular technology to grow marijuana, it's a plant that grows easily in the manner of any other plant. There is some expertise required in its cultivation and this is where the main cost is.
A typical indoor homegrow operation for personal use will yield a pound or two every 3 to 4 months, or 3 to 8 pounds per year. Startup costs for such a grow amount to around $500, including: some nice self-watering pots, adequate grow lights, soil, and plants.
Recurring costs include new soil, nutrients, seeds, water, and electricty. Amortizing the startup costs over 5 years, the total cost for a small homegrow operation is around $6 per ounce. All this is assuming you can get 4 pounds a year out of 10 plants, you're amortizing startup costs over 5 years, you've got 160 watts of grow lights, your electricity costs $0.15/kw-hr, and you spend $50/quarter in other costs. Any of these variables can change, changing the cost of the final product.
So that's for a small personal grow of 10 plants that can be tended in one's spare time, maybe 10 minutes a day at most. If you scale this up to 500 plants, which is a reasonable number for one person to be able to tend, you could make around $150,000 a year after costs if you sold it for $50/ounce.
This seems like a reasonable amount for a small entrepreneur to make, so we can assume that $50/ounce is a good middle baseline for the cost of legal marijuana. Some people might be able to get it down to $20/ounce, some excellent grower might be able to command $100/ounce. It's doubtful that marijuana will be dirt cheap, nor is it likely to be anywhere near the $500/ounce some marijuana receives today.
In this light, the Ammiano tax of $50/ounce seems unreasonably high. A figure of $10/ounce would be more likely to avoid the kind of black market that has risen up around cigarettes, and sometimes alcohol.