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Countdown to Election Day; Mass Overdose at College Party; Crews Reinforcing Rescue Tunnel; North Korea's Heir Apparent; Marijuana on the Ballot; Pot & Taxes

Aired October 10, 2010 - 19:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

I'm Don Lemon. It's the top of the hour and we're going to start with this.

President Obama is trying to rekindle the campaign magic of two years ago, rallying the Democratic faithful in Philadelphia and hoping to sidetrack a resurgent Republican Party. The President and Vice President Joe Biden are trying to fire up their political base.

Polls show that with just 23 days to go until the midterm elections, Democrats could lose control of Congress, which would deal a serious, serious blow to the president's political plans.

Our White House correspondent, Mr. Dan Lothian traveling with the president tonight; Dan, what was the president's goal? Why was he there in Philadelphia?

DAN LOTHIAN, CNN WHITE CORRESPONDENT: Well listen, it really was much like a pep rally. The president and the vice president as you pointed out really try to pump up -- pump up Democrats, the base, but also, independents who played such a big role in ushering in so many Democrats in 2008 and President Obama himself.

It really was a challenge that we heard to voters today, first of all to get engaged, to go out and knock on doors, but more importantly also to show up on Election Day.

Now, right now, enthusiasm and the race for enthusiasm, Republicans are leading at least according to the polls and President Obama is trying to recapture some of the magic from 2008.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I need you working even harder in this election than you did in the last election. We need you -- we need you to fight their millions of dollars with our millions of voices. I look out on this crowd and I see millions of voices. All across the country, we've got to finish what we started in 2008.

(END VIDEO CLIP)

LOTHIAN: Now, in making his pitch tonight, the president was focused on the economy. Laying out what his administration has done and continues to do to try and turn things around and how, as the president described it, the Republicans continue to throw up road blocks.

Now we do expect the president to continue to be out there on the road leading up to the midterm elections. Democratic officials planned to more large events like we saw here today. These are the kinds of events that they believe can really energize voters leading up to those midterm elections -- Don.

LEMON: Now, I'm wondering if the crowd there was indicative of sort of what people are saying is going on around the country Dan. I spoke with Ed Rendell, the governor of Pennsylvania a short time ago and he talked to me about the enthusiasm gap between Democrats and Republicans. How is the president received?

LOTHIAN: Well, I think it was a very good reception here. But you're right, I mean, there is some frustration among Democrats and some of those independents. I talked to someone just a few weeks ago and -- and the sense is that there are a lot of things that they expected the president to get done in his first two years. There were a lot of campaign promises and they believe the administration has been slow in carrying out some of those promises.

So they are enthusiastic, but some of them are a little more cautious and certainly you don't see what you saw in 2008. President Obama realizes that. He knows that when there's a president on the ticket that people really can rally behind it but he says this is a critical election and he's hoping that the voters will see that.

LEMON: He was really turning it on today as we were watching it live here on CNN.

LOTHIAN: He was.

LEMON: Dan Lothian in Philadelphia, Pennsylvania. Dan, thank you for that.

We want to go now to the latest on that mass overdose at a college party in Central Washington State. All but one of the overdoses were young women. Police say it appears that they were targeted.

Our Ted Rowlands joins us now in Cle Elum, Washington. Ted, some of the people at the party say a date rape drug caused the overdoses. What are police telling you?

TED ROWLANDS, CNN NATIONAL CORRESPONDENT: Well Don, police are saying absolutely a drug caused the overdoses and absolutely these victims had no idea that they were being drugged and that is what police have at this point. They don't know exactly what these young men and women, mainly women as you mentioned, 11 out of the 12, were given.

But they are looking into it. What they know as well is what they walked into was completely shocking. They had to breakdown a door to get into this party. But when they got in, they said they saw people laying on the floor in different levels of consciousness. Here's a sample of what some of the students who are at the party say happened.

(BEGIN VIDEO CLIP)

KATELYNN ALLEN, STUDENT: People were having fun and then all of a sudden, sudden -- all the girls were puking everywhere. Girls were outside like on their back and people were so drunk they didn't know what to do.

CHRIS UNGER, STUDENT: They were roofied. So they were -- roofied and they are fallen down, their drinks were going everywhere. And we were just picking them up. I carried about four people downstairs.

(END VIDEO CLIP)

ROWLANDS: Police say they were alerted to this with the call of an unconscious girl in a parking lot of a supermarket. They went and found the girl who was in the car. They asked her friends what had happened and they traced that back to the party. And they went in and the police chief here says it's a good thing they did go in.

(BEGIN VIDEO CLIP)

CHIEF SCOTT FERGUSON, CLE ELUM, WASHINGTON POLICE: No one ever called 911, so had law enforcement not been able to responded at that house and make entry, I would hate to think what could have occurred had there been another 15, 20 minutes that would have passed.

(END VIDEO CLIP)

ROWLANDS: And one of the more shocking things Don, they found when they went into that house was they found a young man having sexual relations with a young woman who, the police chief described as barely conscious at all. They later did determine that the two have a dating relationship, but this young man could face charges because this woman according to the police chief was basically unconscious.

They're also trying to determine who brought this drug to the party. They don't believe it was the party host, who had basically brought some friends to his parent's rental cabin. They say it kind of got out of control because people were texting the address and that's how this all started.

At this point, they don't know who brought the drug and at this point they are not sure exactly what the drug was. They have urine and blood samples off to the state crime lab to determine that -- Don.

LEMON: Ted Rowlands in Cle Elum, Washington State. Thank you, Ted.

In Chile tonight, another step closer to freedom for 33 trapped miners. Crews are reinforcing the first 100 yards of the rescue tunnel with steel tubing. Now once that's done, they'll send down a doctor and a rescue worker to prepare the men for their journey to the surface. And you might think that all of them would want to be the first one's out. But you'd be wrong. (BEGIN VIDEO CLIP)

JAIME MANALICH, CHILEAN MINING MINISTER: We began to talk to them regarding the proper order of rescue. And they -- they were fighting against us yesterday because every one of them wanted to be at the end of the line not at the beginning.

But, we discussed with them that they -- there are particular concerns, technical concerns that make easy, that some of these -- a more fit guys go first. At least four miners and then the more -- the sicker ones in order to provide them with a -- with a -- the treatment they need as soon as we could.

(END VIDEO CLIP)

LEMON: And if all goes according to plan, the first miner could be freed on Wednesday.

A massive military parade marks a major anniversary in North Korea and in a rare move, the country's leader, Kim Jong-Il attends with his youngest son. Coming up, an extraordinary look into North Korea's reclusive communist regime.

And we just don't want you to sit there, we wanted you to be part of this show and be part of the conversation. We're on Twitter, we're on Facebook. We're at CNN.com/don and we're also at FourSquare.com. We're back in moments as well.

(COMMERCIAL BREAK)

LEMON: North Korea's volatile relations with the West may be about to get more complicated and perhaps even more dangerous. Although North Korea is a small, impoverished country, it is a nuclear power with one of the largest militaries in the world and its leader, Kim Jong-Il, is reclusive, belligerent and unpredictable.

The West is technically still at war with North Korea and now, an impending shift to power.

CNN's Alina Cho received a rare invitation to cover this weekend's celebration in Pyongyang, marking Kim's youngest son as his chosen successor.

(BEGIN VIDEOTAPE)

ALINA CHO, CNN CORRESPONDENT: Good evening from Kim Il-Sung Square here in the center of Pyongyang, where tonight, the North Koreans are holding what they call a soiree (ph), the third such event in less than 24 hours officially marking the 65th anniversary of the founding of the Worker's Party of North Korea.

But make no mistake what this is in effect is an elaborate coming out party for the man who will be the next leader of North Korea, Kim Jong-Un, the son of the ailing leader, Kim Jong-Il.

And take a look behind me, it is pure pageantry; the colors, the choreography, literally thousands of dancers, men and women dancing to North Korean propaganda music. There were fireworks earlier as well and earlier in the day right here in Kim Il-sung Square, there was a military parade, billed as the country's largest, some 20,000 military personnel and also a show of North Korean military might; the hardware, if you will, the tanks, the missiles, the shoulder-fired rockets, clearly, a show of the military's strength that this country has.

Remember, this is a country the size of Portugal. The size of the U.S. State of Mississippi and yet it still has one of the largest standing armies in the world. The media, we should mention, has been invited as guests. About 100 of us from around the world, but make no mistake, the guests of honor tonight are in the balcony, Kim Jong-Il and his son the heir apparent, Kim Jong-Un.

Alina Cho, CNN, Pyongyang, North Korea.

(END VIDEOTAPE)

LEMON: All right, Alina thank you.

It's not at all a sure thing that Kim Jong-Un will one day become leader of North Korea. I recently spoke with Gordon Chang. He's a columnist at Forbes.com and an expert on North Korea. He says the younger Kim could easily fall victim to more ruthless and powerful forces inside the country.

(BEGIN VIDEO CLIP)

LEMON: Gordon, this is quite a celebration. Quite the spectacle, isn't it?

GORDON CHANG, COLUMNIST, FORBES.COM: It is. You know ordinary years, the mass games are the biggest event on earth. And this year, it's even bigger because it's supposed to mark the succession of Kim Jong-Un to be the third Kim on the throne.

So this is a very critical time for the regime and that's why they're pulling out all the stops.

LEMON: You know North Korea is so secretive we had only heard about Kim Jong-Un within the past couple of weeks. So what do you know about him and what's to be known about him and do we even know how old he is?

CHANG: We think he's 27. He might be 28. He is the youngest acknowledged son of Kim Jong-Il. He likes a lot of things Western. He was educated in a Swiss school. But really the most important thing is that he is as ruthless and as a calculating as his father, the current leader of North Korea.

He's the one who got the dictator gene.

LEMON: Is that the reason for him and not his two older brothers? CHANG: Well, they -- they went through the two older brothers, who for various reasons failed the test. Kim Jong-Nam, the eldest son, got caught trying to get in to Japan on a false Dominican passport. That sort of ruled him out. Kim Jong-Chol, the second son is a little bit effeminate and although he had his moment in the sun, he didn't last very long. There are various factions in the North Korean regime supporting all three of these kids. And apparently, the one supporting the youngest has won out.

LEMON: So Gordon, as someone educated in the West and familiar with Western culture, should we expect that he will be a different kind of leader than his father?

CHANG: Absolutely not. His father is also -- loves basketball, idolizes Michael Jordan. You know, watches all sorts of Western movies, but he's, you know, like one of the worst dictators ever.

The problem for Kim Jong-un is that there is a system in North Korea, there's a regime. He's very young and he is going to have very little influence over the nature regime and what it does for a very long time. And he very well may not survive because there are so many people who want to be sitting on the throne instead of him.

So, you know, I don't think that he has a very long lifespan.

LEMON: So, how are North Koreans reacting to this sudden appointing of this heir apparent.

CHANG: Well, you know, in the official media, there's just joy and jubilation and everyone is so happy to be ruled by a third generation Kim, but as we saw in the beginning of December of last year, there were protests and riots and demonstrations across the country because of botched currency reform and basically, people do not like Kim Jong-Il at this point. So they're not going to like Kim Jong-Il's son.

He's going to have to overcome that because although Kim Jong-Un will have the support of the regime or at least some elements in it, he certainly doesn't have the support of the people.

LEMON: Gordon, thank you.

CHANG: Thank you.

LEMON: Coming up, we're going talk some politics. Just 23 days until the midterm elections. Will the Democrats maintain control of Congress? Coming up, we check in with our senior political editor, Mark Preston.

Plus, this month, three top lenders announced they were halting foreclosures in a number of states because of problems related to improper paperwork. What about a national moratorium? We'll tell you what the White House says about that.

(COMMERCIAL BREAK) LEMON: The political excitement building. We're now just 23 days away from the midterm elections. Polls show the Democrats could be in trouble and the Party and the president getting a lot of advice on how to get back on track.

Let's talk about it all now with our senior political editor, Mark Preston.

Mark, let's start with some remarks by Eliot Spitzer, the co- host, of course of his new CNN program "PARKER-SPITZER". He has a suggestion for President Obama. Fire the treasury secretary. Fire him.

(BEGIN VIDEO CLIP)

ELIOT SPITZER, CO-HOST, "PARKER-SPITZER": You know what, Mr. President? The reason we have a Tea Party is because your team took care of the same insiders as the last administration. We brought our hopes and aspirations to Washington with you and we've been disappointed.

Please, give us a Treasury Secretary who understands Main Street. I've got some names. Give me a call.

(END VIDEO CLIP)

LEMON: Ok Mark. Let's talk about those comments. How likely is that to happen? Because we had Jim Jones stepping down; Tom Donilon, of course, replacing him. We have Rahm Emanuel. There's been talk about Gibbs and even Axelrod and other people inside the administration stepping down.

How likely is something like that to happen? And there sure has been a lot of turnover and turmoil in this White House lately.

MARK PRESTON, CNN SENIOR POLITICAL EDITOR: Well, I certainly don't think that the president's going to be listening to Eliot Spitzer for his advice on whether he should keep Geithner or not. He's already lost Larry Summers, you know, who was one of the key architects of all things economic in his administration. Summers has left to go back to Harvard.

He actually likes Geithner.

Now what Spitzer is talking about there is that -- Spitzer saying that Geithner was supposed to be overseeing everything that was going on in Wall Street. In fact, in that commentary you know, Spitzer goes on and says that Geithner coddled the banks and was actually the cheerleader and in fact wasn't trying to help Main Street America, he was trying to help Wall Street. So that's why we saw those comments from Spitzer -- Don.

LEMON: Hey Mark, let's switch gears here. Everyone is talking about this new CNN Opinion Research Poll. We asked people who they think has been a better president: George W. Bush or President Obama; 47 percent said President Obama, 45 percent said President -- former President Bush. And as you can see, that is a huge turnaround from last year when 57 percent named President Obama.

So what should we make of these -- these poll results, Mark? Because President Bush left office, a lot of people were upset with him about getting us into two wars, the economy was down. This is definitely surprising.

PRESTON: Yes. And foreclosures as well. Look, that's an amazing drop-off from 57 to 47. But look at the president's approval rating right now; it's at 45 percent. What's really amazing is that President Bush's numbers have crept up and we haven't heard very much from him, Don, since he left office.

He has been very, very quiet. Of course, he has a new book coming out, I guess, in a month or so. But what this means for the midterms is that Democrats have made such a big issue about trying to make the midterms about the past Bush administration, try to invoke Bush's name on the campaign trail as much possible.

In fact we heard President Obama talk about how he feels that Republicans drove the economy into the ditch and he was trying to fix it. Well, given these numbers, maybe using Bush isn't such a good idea -- Don.

LEMON: Mark Preston, thank you very much. Mark we're going to see you tonight at 10:00 p.m. Eastern. We've got you for the whole evening; I think that's what we booked you for, right?

PRESTON: Absolutely.

LEMON: Thank you Mark.

Coming up: Bank of America now halting foreclosures on homes across the country. Earlier, JPMorgan Chase and GMAC froze foreclosures in several states. So, what do you think of a national moratorium? We'll tell you what the White House has to say about that.

And coming up in seven minutes here on CNN -- the CNN cover story: next month, four states will vote on various marijuana initiatives. We'll show you where things stand on legalizing marijuana in this country.

(COMMERCIAL BREAK)

LEMON: Here are your top stories on CNN.

Hungary is racing to stop a new wave of toxic sludge. A cracked wall is threatening to collapse at the same aluminum plant where a reservoir burst last week and unleashed a deadly flood of chemical- laced mud. Crews are building an emergency dam. Thousands of people have been evacuated and troops are on standby for rescue operations.

You know, the wife of this year's Nobel Peace Prize winner is under house arrest right now. A human rights group says she was detained in her Beijing apartment after she returned home from telling her jailed husband that he had won the award. Liu Xiaobo, a key figure in the 1989 Tiananmen Square protests, is serving 11 years in prison. He has been a vocal supporter of human rights and democratic reforms.

The Obama administration is against a national moratorium on home foreclosures, but the president's senior adviser, David Axelrod, today urged that questionable foreclosures with incorrect paperwork be dealt with as soon as possible. On Friday, Bank of America expanded its own foreclosure moratorium to all-states.

Soul music fans today are mourning the death of legendary singer Solomon Burke. Burke, known as the king of rock and soul, died of natural causes at the Amsterdam Airport. He had just arrived on a flight from Los Angeles for a sold-out concert. Burke's best known hit, "Cry to Me, was featured in the film, "Dirty Dancing".

According to his official biography, Burke had 21 children, 90m grandchildren, and 19 great children. Solomon Burke was 70 years old.

You know, some say legalizing marijuana is a win-win for Americans and for states struggling in a tough economy. Next month, four states will vote on initiatives to legalize pot.

Up next in tonight's cover story: marijuana on the ballot; we'll take a look at what a "yes" vote could mean for Americans, and the economy and you.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

LEMON (voice-over): Marijuana is on the ballot in 23 days. The "CNN Cover Story" is about to give you a tour that shows you what a yes vote could mean for America. From the state that started it all with medical marijuana 14 years ago.

UNIDENTIFIED MALE: It is doing something, that (INAUDIBLE) help people that are sick and dying.

UNIDENTIFIED FEMALE: This is our menu.

LEMON: To the state where there are now more pot dispensaries than Starbucks.

UNIDENTIFIED MALE: There's probably 10 dispensaries within a quarter of a mile.

LEMON: It's starting to feel like the end of prohibition.

DANIEL OKREN, AUTHOR "LAST CALL": You can tax marijuana the way that we've always taxed liquor.

DAVID MCPHERSON, OAKLAND REVENUE AND TAX ADMINISTRATOR: There's potential for significant financial growth to the city.

LEMON: A yes vote in California on Proposition 19 could again lead the way to making pot legal for the first time without a doctor's note.

(END VIDEOTAPE)

LEMON: Hello, everyone. I'm Don Lemon. Welcome to the CNN "Cover Story." "Marijuana on the Ballot." Four states will vote on various pot initiatives next month. Add to that 14 states plus the District of Columbia which have already legalized medical marijuana, add to that 11 state legislatures now considering making pot legal in one form or another.

And you have to ask, how is marijuana on the ballot changing America. You don't rely on your imagination. On the "Cover Story" tonight, we're going to give you a firsthand look at that. Beginning with the state that now has more pot dispensaries than Starbucks. CNN's Jim Spellman leads us on a tour in Denver, Colorado.

(BEGIN VIDEOTAPE)

JIM SPELLMAN, CNN CORRESPONDENT (on camera): If you want a glimpse into what it might look like if marijuana's legalized, just drive down South Broadway here in Denver, Colorado. And check out all the medical marijuana dispensaries. Here's the Green Depot, Little Brown House Dispensary, Little Green Pharmacy. They call it Broadsterdam or reefer (INAUDIBLE). This is marijuana American style. This Ganja Gourmet.

UNIDENTIFIED MALE: Those are pot, pot pies. We make -

SPELLMAN (voice-over): Steve Horowitz started Ganja Gourmet a year ago. They sell raw marijuana, but they specialized in marijuana- infused food items.

(on camera): Do you think that this is going to be a growing part of the medical marijuana business?

STEVE HOROWITZ, GANJA GOURMET: Absolutely. In fact, it already is.

SPELLMAN: Ganja Gourmet operates in the open, has eight employees and like all the medical marijuana dispensaries in Denver, it is taxed by the city and state.

And it could be really be big business. So far, the city of Denver in the last nine months has collected $2.1 million in tax revenues.

(voice-over): Horowitz's shares about $4,000 a month. He says he doesn't mind paying the taxes because it helps legitimize the marijuana trade.

HOROWITZ: People are now out of the closet. Nobody's hiding the fact that they smoke pot anymore.

SPELLMAN (on camera): To get a sense of just how normal medical marijuana has become here in Denver, check out "Westward." This is the local free weekly available all over the city. I counted over 100 ads for medical marijuana in here. They even hired a medical marijuana reviewer. (voice-over): There are almost 300 dispensaries in Denver. Lotus Medical caters to an upscale crowd located in a fashionable part of downtown Denver in a historic building. They blend right in.

SHAWNA SANTUS, LOTUS MEDICAL: We deal with a lot of, you know, professionals, lawyers.

SPELLMAN: Shawna Santus used to sell real estate. When that business tanked, she took a gamble on medical marijuana.

SANTUS: We're going to go. There is no business model here. It's not like I opened a she boutique or -

SPELLMAN: The recession has created what she calls the perfect storm for loosening marijuana laws. People want pot and the government's need money.

SANTUS: This is obviously something that not only meets the needs of people medically, but also is obviously a revenue-based, you know, business.

SPELLMAN: In Colorado, there are over 115,000 people on the medical marijuana registry.

SANTUS: This is where we have our medical marijuana.

SPELLMAN (on camera): Wow, there's really a lot of varieties, aren't they?

SANTUS: There is. Currently, I think we have over 28 different strands.

SPELLMAN: So, this is about an eighth of an ounce marijuana? How much does this cost?

SANTUS: This will be 50 plus tax.

SPELLMAN: This is a lot of marijuana, Shawna. Where do you get it?

SANTUS: 70 percent is grown by ourselves.

SPELLMAN: You have an operation here in Denver?

SANTUS: Absolutely. Lotus Medical.

SPELLMAN: Can we check it out?

SANTUS: Yes, absolutely.

SPELLMAN: So this is your grow operations.

SANTUS: We've got four grow rooms operating as we speak.

SPELLMAN: What's in here?

SANTUS: These are our babies. SPELLMAN: Wow, it's really bright in here.

SANTUS: It is. We have to keep these lights on 24 hours a day when they're beginning.

SPELLMAN: There's more to the marijuana business than you might see even at a dispensary.

SANTUS: It is. I mean, that's why you're trying to take it out of the hands of people who don't know what they're doing and putting it in the hands of the people that do.

SPELLMAN: So when the plants get all bigger, they're put on a 12-hour life cycle to simulate daytime and nighttime. You have these special lights to go in and look at them.

These are some big plants.

SANTUS: They are. They are almost at the end of their cycle.

SPELLMAN: There's a lot of marijuana in here, even in these four grow rooms. You can't keep up with the demand at Lotus? You know, you really can't. With your business model, how important is it for you to control the whole process from seed to selling it?

SANTUS: Absolutely, number one in our game is I think is that.

SPELLMAN (voice-over): That's because the mark-up can be up to 200 percent. Keep the growing in house and you keep more of the profits in house.

SANTUS: Smells good.

SPELLMAN: Supply, demand. Markets, customers. It's really not that much different than any other industry even if it looks a little strange.

SANTUS: I'm overwhelmed. I'm blown away that we're able to do it and it excites me.

SPELLMAN (on camera): It feels good?

SANTUS: It does feel good.

SPELLMAN: Jim Spellman, CNN, Denver, Colorado.

(END VIDEOTAPE)

LEMON: So, a lot of what's driving the push to legalize marijuana in some form or another, money, of course. The potential for the government to collect taxes. Do the numbers add up? When we come right back, we'll look specifically at Oakland, California and later, for parents really concerned about this trend of marijuana on the ballot, advice from a leading child psychologist.

And a 1920s perspective on all of this for you. We'll see the striking parallels between marijuana on the ballot now and the fall of prohibition.

(COMMERCIAL BREAK)

LEMON: Welcome back to the CNN "Cover Story," everyone. I'm Don Lemon.

Marijuana on the ballot. Our next stop, California. Proposition 19 would make small amounts of pot legal for people 21 years and older. They don't call it regulate, control and tax cannabis for nothing. Right there in the fine print, it cites the potential to raise hundreds of millions of dollars in taxes and fees every single year. A new source of income for the state in a bad economy. True?

CNN's Ted Rowlands is looking for answers in Oakland.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Are you looking for something particular?

TED ROWLANDS, CNN CORRESPONDENT (voice-over): Oakland's Harborside Medical Marijuana Dispensary is the largest in California, grossing more than $21 million in sales last year.

STEVE DEANGELO, HARBORSIDE HEALTH CENTER: Our total tax payments last year were close to $3 million. That would include California sales tax, California income tax, U.S. federal income tax and the city of Oakland cannabis tax.

ROWLANDS: The city of Oakland has completely embraced the sale of medical marijuana, with few in any problems according to officials.

MCPHERSON: Because of our partnership with them, and trying to work with them instead of fighting them and looking at it, we look at this as an opportunity not only for people who had medical problems and a need, but also an industry that has something to offer to us, not only financially but to our community in providing jobs.

ROWLANDS (on camera): Last year, the city of Oakland made $60,000 in just permits for the four dispensaries. They also have a 1.8 percent tax. Add to that regular sales tax and the city pulled in about $800,000 in revenue over the sale of medical marijuana. But when you consider the overall budget in the city of Oakland is more than $400 million, it's not a lot of money.

BEAU KILMER, RAND DRUG POLICY RESEARCH CTR: When you buy cocaine, heroin, methamphetamine or marijuana, part of what you're doing is compensating the drug dealer. And everyone else among the supply chain (INAUDIBLE) risk incarceration. That goes away with legalization. We calculated that after legalization, we would expect the pre-tax price to drop by more than 80 percent.

ROWLANDS (voice-over): The city of Oakland still think it will make good money.

MCPHERSON: The medicinal side right now is about 20 percent of the total business out there. If the adult usage is 80 percent of that, that's about $80 million. So there's potential for a significant financial growth for the city and for this community.

ARTURO SANCHEZ, SPECIAL BUSINESS PERMIT DIVISION: I do think that we have the right pieces in place to allow us to be, you know, a barrier breaking city. We're on the (INAUDIBLE) position is what I could say. We're ahead of the pack.

ROWLANDS: While nobody knows what legalizing pot will do to California, it's a good bet that if it's legal, it will be for sale in Oakland.

Ted Rowlands, CNN, Oakland, California.

(END VIDEOTAPE)

LEMON: The government's appetite to increase tax revenues in a bad economy, it is nothing new. What a coincidence though. The same thing happened during prohibition and that's not the only parallel between marijuana on the ballot today and alcohol in the 1920s.

How about a doctor's prescription for booze? Also, marijuana's impact on young, developing minds and advice from parents who want their children to stay away from pot, when the CNN "Cover Story" returns.

(COMMERCIAL BREAK)

LEMON: Welcome back to the CNN "Cover Story," everyone. With marijuana on the ballot in 2010, we thought we'd revisit the 1920s just for a few minutes because even in the days of prohibition when alcohol was banned, there was a lot of legal drinking going on.

Just look at this. It is an actual doctor's prescription for alcohol. Notice the official Department of Treasury seal on the prescription form. Taxes. If you're too young to remember this, Daniel Okren has written a book. It's a fascinating book called "Last Call, the Rise and Fall of Prohibition."

Earlier, I got his unique take on marijuana on the ballot.

(BEGIN VIDEOTAPE)

LEMON: Mr. Okren many of us have probably forgotten or weren't even around to see the parallels between what's happening now in California and really in a country where it comes to marijuana as to what happened during prohibition.

OKREN: It's amazing how many parallels there are. The primary one is the one that is leading to what I think will be the passage of Proposition 19 in California. During the late '20s, the depression hits and suddenly, federal government's revenue just plummets.

The income tax, they're collecting very little income tax. There's no capital gains tax at all and the government needed money. And back before prohibition, one of the primary sources of government revenue was the tax on liquor. And I think what we're seeing now in an anti- tax environment where people don't want to pay income tax or sales tax, somebody looks around and says "oh, here's something we can do. We can tax marijuana the way that we've always taxed liquor.'

LEMON: But what about public opinion though surrounding marijuana now? Was it is same the same then as to alcohol because there's part of the country that says no, marijuana's a slippery slope.

OKREN: I think there's a little bit of a difference, but what people had seen during the '20s is that the prohibition on alcohol had failed entirely. People were drinking a great deal. It went down a little bit in the beginning, but by the end of the 1920s and the early '30s, it was back nearly where it had been before.

LEMON: And you know when people think about medical marijuana, you know, there are few places in the United States where you can get medical marijuana and that is accepted. There are very few places in the United States where you can get medical marijuana and that it is accepted, but there was also medical alcohol back during prohibition. So it's kind of the same thing, isn't?

OKREN: One of the most amusing parallels is the notion of medical marijuana, you can walk down Venice Beach in California and you can see somebody underneath the sign that says "Prescriptions, $100." And it's doctors selling prescriptions. Back in the '20s, exactly the same thing happened. It's just that the prescription was only $3. With prescription from your local doctor, you can trot down to the pharmacy, hand it across the counter, get a pint of liquor every 10 days and (INAUDIBLE) legal.

LEMON: There are people who say consuming marijuana, they feel better and their symptoms actually ease.

OKREN: There is an absolutely medical use for marijuana. Many medical uses for marijuana which are perfectly respectable, but if you're around in Colorado or California and you want to get it for whatever reason, you want to get it legally, with no problem and with no symptoms.

LEMON: And if we learn from history, then what will we learn, you think about marijuana that we learned from prohibition, if anything?

OKREN: It will become harder to get. That was one of the ironies of prohibition because during prohibition when it was illegal, there was no regulatory structure. So if you were selling liquor, if (INAUDIBLE) you could sell it seven days a week, 24 hours a day to anybody you wanted to. It was only once they put in the liquor laws that suddenly, you couldn't be near church, you couldn't be near a school, you had to close at 2:00 a.m., couldn't sell to miners.

LEMON: Where I live here in Georgia, you can't get it here on Sunday and in many communities, you can't do the same thing. So again, where do you see this going with marijuana, do you see the same sort of thing?

OKREN: There's a recognition I think that the stuff is being sold anyways and is being consumed, anyway and so why shouldn't the government a, collect some revenue out of it and b, why shouldn't we starve the Mexican drug operations that are distributing so much of it?

LEMON: Daniel Okren, thank you.

(END VIDEOTAPE)

LEMON: When the CNN "Cover Story" returns, Dr. Sanjay Gupta on marijuana and your health. And for parents who are worried marijuana on the ballot is yet another threat to their children, expert advice from a child psychologist.

(COMMERCIAL BREAK)

LEMON: Welcome back to the CNN "Cover Story." Marijuana on the Ballot.

When we were digging through the CNN archives, we came across a big marijuana story from last year. The headline the potency of the pot has been steadily rising over the years. When that news broke, our Anderson Cooper turned to chief medical correspondent Dr. Sanjay Gupta with some key health questions.

(BEGIN VIDEOTAPE)

ANDERSON COOPER, CNN ANCHOR: OK. So it's more potent, what does that actually mean? Is it more - I mean, is pot addictive?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, some people say it is, and some people say it's addictive to the point where it might be a gateway drug, but that is also a controversial point. What it does in the brain is sort of more well defined. There are these receptors in the brain called cannabinoid receptors. They do all sorts of things. They're located in specific areas of the brain responsible for memory, responsible for decision making, cognition as well. What is interesting is when these receptors are activated, it also releases dopamine, which is the feel good hormone that we talked a lot about and that's the thing that makes people, gives people that high.

COOPER: Stronger pot affect the young people differently?

GUPTA: Well, the younger brain is still developing and so the studies that we've looked at say that it should effect, at least, theoretically younger brains more so because they're being more affected by this psychoactive substance. So again, memory problems, problems with cognition, decision making, judgment overall may be affected but again it is hard to say for sure with any conviction that those side effects last into the future or long term.

(END VIDEOTAPE)

LEMON: OK. So that phrase that Sanjay used, the developing brain, that's what has many opponents of California's Prop 19 worried. Will marijuana legalization make it more accessible to our children, our teenagers, our developing brains in this country. Dr. Erik Fisher is a top psychologist who spends a lot of his time counseling teenagers who have drug producers and he is the author of "The Art of Empowered Parenting, the manual you wish your kids came with."

Dr. Fisher, thank you so much for joining us. So if Prop 19 type laws go into effect in America, marijuana gets an official stamp of approval, supplies go up, prices go down, will more kids start smoking pot?

DR. ERIK FISHER, AUTHOR, "THE ART OF EMPOWERED PARENTING": You know, it's still going to be illegal for kids under 21. So I think the issue you're going to look at is it's similar to an issue with alcohol. Whether or not kids are going to do that is going to really depend on some of their own inclinations, their own behaviors, people they're hanging with, how they are parenting and family lives and things like that so I don't necessarily see that it will be that much different than what's been going on with alcohol usage.

LEMON: I was going to say what about the developing brain and alcohol? What's the difference? Is there a difference between pot and alcohol when it comes to developing brains?>

FISHER: Well, I think that the effects of alcohol are you know, shorter lasting in terms of how long it stays in the body, the half- life of alcohol, but any habitual or chronic usage of any drug is definitely going to have impact on any developing brain.

LEMON: You know, that was initially my first thought when we were talking about this is that obviously, you know, it's a big concern to parents, but is it just a false argument especially if it's going to be legalized in the same way that alcohol is legalized and then parents should keep it away from their children just as alcohol. I had, you know, alcohol is very accessible in my house and in my friends' homes, and if we tried it we would just put water in the bottle, and you know, put it back on the shelf.

FISHER: Right. Well, bottom line it comes down to good parenting to me and parents being involved. You can't expect -

LEMON: What I'm saying is what is the difference then, between that and is it a false argument about that people saying, it shouldn't be because it's a gateway drug. Well, your kids shouldn't be doing it anyway before they're 21.

FISHER: Right. I agree. I absolutely agree. So I think even in terms of being a gateway drug, you could also argue that alcohol can be a gateway drug because the issue with alcohol is that it's a mind altering drug, and we've used more fear tactics with marijuana I think over time than we have with alcohol because alcohol has been legal.

So what have you is once a child or a teenager tries marijuana and they say "hey, wait, this isn't as bad and this whole thing didn't happen to me, and this didn't happen, they're potentially more likely to say, well, I can't trust what you said was true so I'm going to try it for myself and figure it out for myself."

LEMON: All right. So if Prop 19 passes and you're a parent who wants to give some advice to your children or if you want to give parents' advice, what do you tell your children about marijuana?

FISHER: Well, what I want to help people to see is that anything that alters your mind state, if you have to alter your mind state to feel better about life, to feel like you can cope, to feel like things can be easier or you can fit in, that's an issue. Whether it's cigarette smoking, alcohol, marijuana. That's the first issue.

The other thing I want to help parents to do is help educate your kids and educate yourself with your kids, sit down at the internet. There's plenty of information to read in the internet. Answer your questions as well as your kids' questions, don't just say well, I won't answer that because you don't know the answer.

Do some research with them. Be involved with your kids from early ages. You're preparing your children when they're two, three, four, five years old for their teenage years. It's a journey.

LEMON: All right. Adults want to drink alcohol. Therefore, now it is legalized. Some people want to smoke marijuana and it is on the ballot now. Should that, because we're concerned about our children or with the developing brain or what have you, should that outweigh the medical benefits for marijuana, people with cancer, people with cataracts, people who have upset stomachs, HIV patients. All of that, should that outweigh legalizing or outweigh, you know, people saying "hey, there's a legitimate medical use for this?"

FISHER: I believe there is a medical use for it in certain situations. And I think -

LEMON: So where do we place the priority here is the question I'm asking.

FISHER: I think we want to look at - we live in a free country where we tell people they have the ability to choose and make choices. You know, that's one issue we have to look at. We also have to look at what's in our best interest, sometimes people who don't make good choices or look at for what's truly in their best interest, choices need to be made for them. I talked about two ways to look at power, what is their hierarchical model of power and an equity model of power. I tell people if you make a hierarchal choices, you're going to suffer the hierarchical consequences. Meaning, if you make choices that don't work for you and aren't working for other people, other people might have to step in and make some choices for you.

LEMON: This is a legitimate question I think. You know, some people might think it's funny. I just ask people for questions on Twitter.com, and it says - someone says "when I was in high school I've seen students who went to class high actually do better. What does your guest think about that?"

FISHER: I think that we have to look at some people with anxiety actually feel like in some situations it helps calm them, it helps focus them. I work with a lot of teenagers, a lot of teenagers with attention deficit issues, anxiety issues and things so depending on that person and that individual, you may see some positive affects, you know, in some degree.

However, what I want to caution people against is when you get into habitual use, that's when you start to see some of these negative effects, memory loss, slowed reaction times, psycho motor retardation, things like that that are going to have negative influences over time.

LEMON: The book is called "The Art of Empowered Parenting" from Dr. Erik Fisher. Thank you for joining us in the CNN "Cover Story."

I learned a lot and I hope our viewers did as well. I want to tell you that CNN is on a mission to explore how a yes vote on these marijuana initiatives especially that California Prop 19, how it could impact America. America on the ballot, it will be featured on "CNN NEWSROOM" tomorrow.

I'm Don Lemon at the CNN World Headquarters in Atlanta. An "AC 360" special town hall discussion about how to protect your children and stop bullying starts right now.