State election officials have said Californians will vote in November on an initiative to legalize marijuana, thereby setting the stage for a heated campaign on relaxing drug laws.
Using the drug for medical purposes has been legal for 14 years in California.
But the new initiative, which state election officials announced on Wednesday had obtained enough signatures to be on the ballot during this fall's mid-term elections, also seeks to legalize recreational marijuana use.
The Regulate, Control and Tax Cannabis Act of 2010 would allow counties and cities in the state to adopt ordinances to authorize cultivating, transporting and selling marijuana, raising revenue through taxes similar to those on alcohol and cigarettes.
Supporters are hoping the taxes will help garner support for the measure at a time when the Golden State is suffering from a crippling budget crisis.
The initiative would save "up to several tens of millions of dollars annually to state and local governments on the costs of incarcerating and supervising certain marijuana offenders," Secretary of State Debra Bowen said in a statement.
She also pointed to "unknown but potentially major tax, fee, and benefit assessment revenues to state and local government related to the production and sale of marijuana products."
Governor Arnold Schwarzenegger has already spoken in favor of imposing a tax on marijuana consumption in a bid to bridge the economic gap plaguing the country's richest and most populous state.
Under the measure, people aged 21 and older could own up to one ounce (28 grams) of pot for personal use. Possessing an ounce or less of marijuana has been a misdemeanor with fines of 100 dollars since 1975, when a law was passed that reduced tougher penalties.
It would also allow adults to grow up to 25 square feet (two square meters) of cannabis per residence or parcel.
According to drug legalization supporters, arrests for marijuana possession have risen dramatically in California over the past two decades.
"Our current marijuana laws are failing California," said Aaron Smith, California policy director for the Marijuana Policy Project.
"Year after year, prohibition forces police to spend time chasing down non-violent marijuana offenders while tens of thousands of violent crimes go unsolved -- all while marijuana use and availability remain unchanged."
Yet polls have shown that while most California voters want to legalize marijuana, there is not a large enough margin to ensure the measure would pass.