A California state assemblyman from San Francisco has introduced legislation that would legalise and tax marijuana, a move he hopes will help shore up the state's dire finances.

The bill by San Francisco representative Tom Ammiano, would legalise the cultivation, possession and sale of marijuana by people 21 and older. It would charge growers and wholesalers a $5,000 (£3,400) initial franchise fee and a $2,500 annual renewal fee, and would levy a $50 per ounce fee on retailers.

The law, which would make California the first state to legalise marijuana, would inject an estimated $13bn a year in revenue into California's empty coffers. Governor Arnold Schwarzenegger on Friday signed a $130bn budget that raises sales and income taxes, and dramatically slashes spending. States across the country are facing massive revenue shortfalls, as income and real estate tax receipts fall and outlays for unemployment insurance and health coverage rise.

"It is simply nonsensical that California's largest agricultural industry is completely unregulated and untaxed," Marijuana Policy Project California policy director Aaron Smith said at a news conference announcing the bill. "With our state in an ongoing fiscal crisis — and no one believes the new budget is the end of California's financial woes — it's time to bring this major piece of our economy into the light of day."

California Republicans seem to oppose the bill.

"I think substance abuse is just ruining our society," Assemblyman Paul Cook told a California newspaper, as if it were slothful dope-heads and not, say, gluttonous financial services executives that had wrecked our economy. "I can't support that."

The bill is the first of its kind in California, according to Marijuana Policy Project communications director Bruce Mirken, who cites research showing that marijuana is America's largest cash crop.

I can't predict if this bill will pass, or even get out of committee. (Note that in Pumping Iron, the champion bodybuilder Arnold Schwarzenegger famously tokes on what appears to be a joint, while reclining on a weight bench). But it is certainly one of many legalisation efforts to come.

In his fantastic book on generational marketing, The Age Curve, demographer Kenneth Grombach predicts that as the dope-friendly baby boom generation takes power from the far more conservative "silent generation" born between 1925 and 1945, marijuana will become legal "very soon":

Wait until marijuana is legal. The former hippies will come out of the woodwork to try a little taste of the weed again.

The Sacramento Bee conveniently captured one of the main, and most spurious, arguments against legalisation:

Theresa Loya, 43, of Mariposa, said the bill indirectly could affect children.

"I'm afraid it would send the wrong message – that drugs are OK," she said.

Does Ms Loya fear children might get the idea one can smoke some dope and become, say, president of the United States, or the greatest swimmer of all time?

One hurdle to legalisation: federal law would still outlaw it.

President Barack Obama, who has acknowledged smoking pot in his younger years, has said he does not favour legalisation of marijuana, but has indicated he would end federal drug enforcement agency raids on medical marijuana suppliers in states that allow it.

Since 1996, 13 states have enacted laws allowing marijuana use for medicinal purposes, according to the Marijuana Policy Project. California was the first.