With the state out of money, the economy in a tailspin and our prisons overflowing, California’s laws against marijuana make no economic sense. Every year, the state shells out millions in taxpayers’ dollars to arrest, prosecute and imprison marijuana offenders in a vain attempt to stamp out its use. Meanwhile, legal and more dangerous drugs such as tobacco and alcohol are generating billions in revenue for the state.

California taxpayers would benefit from a bill by Assemblyman Tom Ammiano, D-San Francisco, that would legalize, tax and regulate marijuana for adult use. The bill would establish a state licensing system for producers and distributors, who could sell to adults over 21. Producers would pay an excise tax of $50 per ounce, or about $1 per joint. Additional revenue would be generated from sales taxes. Altogether, tax revenue would be on the order of $1 billion, comparable to the cigarette tax. This is a common sense, fiscally conservative policy that would regulate cannabis in a manner similar to other legal intoxicants and raise much-needed revenue.

At the same time, this policy would eliminate marijuana-related crime and law enforcement expenses, which include an estimated $170 million annually for the arrest, prosecution and imprisonment of marijuana offenders. It would likewise put an end to such prohibition-related problems as the proliferation of black market dealers, grow houses, smugglers and pirate gardeners on public lands.

Finally, a legal marijuana industry could generate substantial additional economic benefits in legal employment, business and payroll taxes, and spinoff industries — like the wine industry, which currently contributes $50 billion to California’s economy.

History shows that California’s laws against marijuana have failed. Only after being outlawed did marijuana become widely popular, eventually spreading to millions of Californians. By 1975, enforcement costs had become so high that the Legislature decriminalized possession of small quantities under the Moscone Act, saving the state $100 million each year.

Despite dire predictions by opponents, decriminalization had no perceptible effect on marijuana use by either adults or young people. Nonetheless, production and distribution remained illegal, causing continued prohibition-related problems. In 1990, the California Research Advisory Panel urged further decriminalization, noting that “an objective consideration of marijuana shows that it is responsible for less damage to society and the individual than are alcohol and cigarettes.”

In 1996, California voters legalized the medical use of marijuana in Proposition 215 (though neglecting to establish a legally regulated supply system). Contrary to the predictions of opponents, marijuana use by youths actually declined after Proposition 215’s passage, but arrests continued unabated.

In 2007, marijuana-related arrests jumped to 74,119 — their highest level since the Moscone Act. California now has more than 1,500 marijuana prisoners, more than 10 times as many as in 1980. Marijuana accounts for 61 percent of the illicit drug traffic from Mexico, where prohibition-fueled gang wars have killed over 6,800. In California, agents eradicated a record 5 million illegal plants last year, up more than tenfold since 2003. The value of the illegal crop has been estimated as high as $14 billion, enough to qualify as the state’s leading crop.

Ammiano deserves credit for recognizing that the only way to solve the marijuana problem is to legalize, tax and regulate it. As usual, California is ahead of the rest of the nation. Ammiano’s bill provides a pathbreaking blueprint for change that would benefit our economy, safety and freedom by making marijuana a winning proposition for California.

Dale Gieringer is the director of California NORML (the National Organization for the Reform of Marijuana Laws), a supporter of Ammiano"s legalization bill. He wrote this article for the Mercury News.