The city of Sacramento is being proactive about maximizing tax revenue from marijuana if the drug goes fully legal.

With marijuana legalization likely on the California election ballot this November, Sacramento is doing its best to prepare for this transition to legalization by making sure that its rules and regulations for medical marijuana are up to date.

Craig Ashton: “So last week, the city council voted to approve cultivation permits for medical [marijuana] clinics, to grow indoors within city limits. According to an individual who speaks for the medicinal marijuana lobby, they say the average dispensary brings $104,000 a year in extra tax revenue to a city. So, the idea is that, Sacramento is being smart, I think, right? Because this is already going on, medical marijuana is legal in California. New rules have been passed to kind of regulate it better, because it was a little bit of a mish-mash to begin with.

“One of the reasons Sacramento’s got this renaissance, and I was adding it up this morning, there’s probably about two and a half billion dollars in investment going in. We’ve got the arena, that $800 million that just went in for the Sutter building, we’ve got Kaiser putting in a $500 million new hospital, we may have another half a billion dollars put in for a soccer arena—”

Here Ed Schade jumped in with a loud stage whisper of “Courthouse.” Apparently, it would be pretty embarrassing for a lawyer to forget about Sacramento’s future courthouse.

Craig recovered in stride: “Yes, we’ve got the courthouse, half a billion dollars.”

Tim Hodson chimed in with, “The Wynn Resort.”

Craig continued again: “And then all these different new restaurants and hotels. And then now 3rd and Capitol’s being developed.

Sacramento’s growing fortunes are making it more acceptable for it to tout the potential for, well, growing fortunes from marijuana.

Craig: “So the moral of the story is, without the legal issues [that Sacramento has recently faced] associated with franchisor/franchisee contracts, anti-trust, eminent domain, we’re dealing with election law, we’re dealing with California Environmental Quality Act… If all those things don’t fall into line, you don’t get two and a half billion dollars in investment. Then, you’ve got blight downtown, and people going, ‘You know what? Sacramento’s going in the wrong direction.’ And you’re probably not going to have a city council with enough wherewithal to say, ‘Look, let’s go ahead and make it easier for medicinal marijuana to be grown, but let’s tax it.’ Because people go, ‘Look, our city’s going to H-E-double-L-L in a handbasket, and we don’t want to now promote drug use, right?’”

“Now, because everything’s going right, they’re saying, ‘Look, let’s be realistic about this, this is happening.’ And so what they’ve done is… [growing marijuana is] allowed indoors, not outdoors. It’s going to have to be a warehouse of 22,000 square feet or less, and it’s going to be in an area zoned for agricultural or commercial use, and it can’t be within 600 feet of a school or a park. Seems reasonable.”

Tim Hodson stepped in to support and elaborate on Craig’s reasoning: “It’s reasonable. It’s also a necessary evil. Part of the laws that have been written [lay out that in] 2018 or 2019, you can’t grow out of the same place you’re selling, and so if you have a dispensary, right now you can have a cultivation in the back and you can come out and sell it. But, I believe it’s 2018, the dispensaries can only be, basically, a place to sell [marijuana]. They can’t also be growing [it] there as well. So, this is… a necessary evil, but it’s also a smart way to backdoor it into a tax initiative… Because of [how the law will require dispensaries to be physically separate from grow houses, they’ll] be able to tax it on two separate levels. You’re taxing the cultivation and the sale. So, it’s smart. If you’re going to do it, you might as well raise revenue while you’re doing it.”

Craig Ashton, Ed Schade, and Tim Hodson spent several more minutes discussing the potentially vast amount of tax revenue that could be raised for the state by legalizing marijuana, as well as the possibility of serious legal conflict with the federal government, especially if a conservative Republican with a dim view of recreational drug use is elected to the White House. To catch the full conversation, check out our YouTube video above.