Remember all those stories you heard about how California is going bankrupt? Turns out Gray Davis wasn't the problem so much as an unmanageable, unproductive state government. But with fiscal crisis comes inventiveness. Creative people (read: potheads) are trying to come up with ways to raise money for the state.
Enterprising druggies have been suggesting that the outright legalization (and taxation) of marijuana would go a long way toward alleviating the state's budgetary problems. I guess the argument is that millions of people, desperate to get high, would flock to the Golden State for all their weed-related needs. They would dutifully pay for their pot, and state tax revenues would consequently be higher than Cheech and Chong.
I am skeptical that this would result in a net positive for the state. As the above-referenced article points out, tobacco and alcohol impose tremendous social costs, which likely are not outweighed by the heavy taxation we impose on those products. The same is true of highly carcinogenic and hallucinogenic marijuana. Moreover, a huge influx of drug-seeking tourists may very well create problems of its own.
I am also reluctant to buy the "prohibition-hasn't-been-working-and-thus-should-be-done-away-with" argument. The answer is to fix and refine our drug enforcement techniques, not do away with them completely. Stop searching for and incarcerating recreational drug users. Go after the big producers and traffickers.
The problem in California is more serious than just a lack of revenue-raising measures. The real issue is the state's ineffective constitution, which is wrought with roadblocks that prevent anything from getting done. California needs to restructure their government from the ground up, instead of focusing on piecemeal solutions. The only thing Californians would get out of marijuana legalization is the munchies.