Legalization of recreational use of marijuana could mean a tax bonanza for California with tax collectors already taking the first steps toward getting a handle on the emerging industry.

The California Board of Equalization approved a proposal Tuesday to ask for funds to hire staff in anticipation of 2018 when legalization of recreational use kicks in after California voters decided Nov. 8 to approve Proposition 64. As many as 25,000 cultivators are expected to register and begin paying taxes. The board expects to need $20 million by 2021 to support a staff of 114.

State analysts estimate local governments could see $1 billion in revenue from the production and legal sale of marijuana even though pot remains illegal on the federal level, and it is unclear how the incoming administration will deal with the patchwork of laws across the country.

Eight U.S. states and the District of Columbia allow recreational use of marijuana. In all, 28 states and the District of Columbia allow medical marijuana, with more poised to enter the club. California was the first state to approve medical marijuana. Some 1,700 dispensaries have opened in the past 20 years.

President Barack Obama said in a Rolling Stone interview this week he thinks marijuana should be regulated like alcohol and cigarettes.

Proposition 64 directs the state to treat cannabis like alcohol, allowing people at least 21 years of age to possess an ounce of pot legally and to grow six plants in their homes. Cities and counties can impose their own regulations and taxes.

Consumers will pay a 15 percent excise tax on retail sales for both recreational and medical marijuana, and a cultivation tax will be applied to harvested plants on the commercial market.


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