Could loosening the criminal sanctions on the possession, cultivation and sale of marijuana in California save a significant amount of money for the state, cities and taxpayers while boosting tax revenue?

That is the determination of a Legislative Analyst Office report recently released. The report is in response to The Marijuana Control, Legalization and Revenue Act of 2016 — a proposed state law that would allow those 21 years and older to legally possess, sell, transport, process and cultivate marijuana — albeit with some restrictions. The measure would establish the Cannabis Control Commission that would regulate the commercial cultivation, processing, distribution and sales of marijuana.

According to the LAO report sent to the California Attorney General’s office, legalizing marijuana would slash costs for state and local governments by decreasing the number of marijuana offenders incarcerated in state prisons and county jails, as well as those under community supervision, such as probation. It would also reduce state and local costs for the enforcement of marijuana-related offenses and the handling of related criminal cases.

The LAO report also discusses revenue from sales taxes that state and local governments would receive from the sale of marijuana that would be permitted under the proposed measure. The idea is that many who are currently purchasing marijuana illegally could begin purchasing it legally under state law from businesses that collect sales taxes. In addition, state and local governments could also receive additional revenue from excise taxes.

The LAO estimates that the net drop in state and local criminal justice costs could exceed $100 million annually.

Although Californians passed Proposition 215 in 1996, legalizing the cultivation and sale of marijuana for medicinal purposes, as it currently stands, the possession, cultivation or distribution of marijuana is illegal, subject to various penalties. For example, possession of less than one ounce of marijuana is an infraction punishable by a fine, while selling marijuana is a felony and may result in a jail or prison sentence.

State law also authorizes cities and counties to regulate the establishment of medical marijuana dispensaries in their jurisdictions. If passed, the measure would prohibit the Legislature and local governments from further regulating the use or distribution of marijuana beyond the regulations established in the measure. However, the measure would provide local governments some regulatory authority, such as the ability to enforce local zoning and nuisance laws against marijuana businesses.

If California legalizes marijuana, it would follow several states that have already done so, including Alaska, Washington, Colorado and Oregon.