California’s High Taxes for Recreational Marijuana May Help the Black Market

Money and marijuana featureNew taxes are coming when recreational cannabis becomes fully operational in California next year. These taxes will not just apply for the grower but also for the recreational user. These taxes include those imposed by the state and by the county and in some cases taxes imposed by cities.

The Los Angeles Times pointed out in an article this morning,

On a retail level, it costs about $35 to buy a small bag of good quality medical marijuana in Los Angeles, enough to roll five or six joints.

But in 2018, when recreational sales take hold and additional taxes kick in, the cost of that same purchase in the new market is expected to increase at the retail counter to $50 or $60. At the high end, that’s about a 70% jump.

The article warns that taxing legitimate cannabis at such a high rate could allow the black market to flourish.

According to Fitch Ratings, a credit reporting agency, “High taxes increase prices in legal markets, and have the effect of reinforcing price advantages to long established black market cannabis…Taken together, state and local tax burdens put California at the high end of the tax range for states that have legalized nonmedical cannabis.”

 

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33 comments

  • Increase the call for more law enforcement to chase after the black market.

    Similar to the past CAMP operations, taking local officers away from daily operations and the need to ask for increased budgets for more officers to make our public and private lands safe – not good to take local law enforcement away from local work.

    Would the fight for control over cannabis turn into an open war similar to the alcohol prohibition in the earlier year of the 20th century?

    • I also see similarities to the Moonshine war, and the high cost of going legal. There are no winners in these wars.

    • it’s legal now so we need less reefer madness not more. Cops go after criminals not salad manufacturers…. it’s not illegal, but legal. Cops vs meth and her on? God bless em

  • That’s a hefty tax……

  • it costs a lot of money for a sanctuary state, everybody is being bleed dry by taxes, maybe a black market is in order,

    • HOGRANCH yep just the hosing of California thanks to the mighty efforts put forth by the never good moonbeam…hey Jerry still trippin with Linda and friends didn’t work then, won’t work now,fuck you and this state…

  • It will increase the incentive for those looking to keep the black market profits all to themselves. But then a government looking to tax is a pretty hungry beast. I bet on the government winning this eventually as tax evasion is one thing the whole justice system is unified in wanting to prosecute. People get nasty when its the source of the paychecks.

    • Call it tax , i call it legalised theft , until ag is taxed the same that is all it truely is. People what other people or items to pay for their own expesnses and telish the idea of other people paying more than their share to cover what they would have to pay for services. Until there is personal responsibility and people willing to pay full price for the services they want or require it is and always will be theft.

      • Hmm… I wonder how it compares to tobacco? BTW the county charges me for a nonstandard septic system but as far as I can tell does nothing except send me a bill. Same with the Calfire fee. School bonds when I have no school age children. I’m sure there are lots more that I try never to think about.

        Welcome to the wonderful world of sin taxes. Just like all the surtaxes on rich people, it has more to do with picking on those who the public is ok with zapping or who generally have something to get or are not beloved by the media as good victims. Pot is not carrots.

        • Who the fuck do you think paid for YOUR education?

          • Not to the point. Or maybe you trying to make the point yourself with sarcasm?

            Putting again as simply as I can, the point is that taxation these days is more about sticking it to those who can’t or won’t defend themselves- the less popular, the minority, the ugly. Especially the ugly. Or taking money in a hundred small ways rather than face a revolt. Only someone pretty oblivious would claim ‘fair’ as a limit on taxation. Or a Republican.

            The whole issue of pot taxes will be resolved in court but only at the point the pot industry has learned to toe the line. If the black market is still rampant then the legal growers will be paying for enforcement for those who won’t. And the government can not afford stop enforcement actions because everyone will grow illegally.

      • Tea party much? Stay off public roads. Stay out of hospitals. Build your own wall.

  • Charles Engebretson

    Devils cabbage…sorry I had a flashback to honeydew..so lower the tax.Government will still make money

  • #blackmarketmatters. We will live on!

  • Friendly Observer

    Paying $60 plus for an eighth of an ounce equates to insanity. On the wholesale market an eighth is “worth” around $10. Paying $60 dollars amounts to a 500% increase over the wholesale price (assuming a wholesale price of $1280 a pound).

  • This is a serious vice tax, although with legalization it will force many to grow their own, get some seeds and save the $60 1/8s for the tourists. This tax is not fair nor balanced, $10 an Oz across the board and call it that.

  • Pingback: California slapping high taxes on marijuana, causing sticker shock for some – Just latest news

  • What’s next…Broccoli, onions and tomatoes taxed by the sq foot of cultivation space?

  • Dope growing is less of a police issue now, more a county code violation. Call the county on illegal dope growing operations.

  • This is great news for those who neglected to go through the permitting process and get ass raped by bs fees and taxes. The unpremitted indoor facilities get the real win here!! Time to play ball again….

  • A good way for politicians to understand if the high taxes will or will not work is to imagine what would happen with compliance is to add similar tax amounts to cigarettes and alcohol and think about what would happen.
    That’s right,…all hell would break lose.

  • Once you go black..

    I’ve not come to expect greatness from governmental arm nor agency, this bill was flawed as fallow lettuce from the fall,

    “We used to make shit in this country, build shit, now we just stick our hands in the next guys pocket”

  • The Black Market could use a little more good news like this I think

  • It’s comforting to know they didn’t lie when they warned that Pot increases criminal activity.

  • It will also turn all processing work into low pay and poor conditions. We need regulation to protect workers. We have failed at this in conventional agriculture where the labor of illegal immigrants is exploited on a massive scale. We have already seen the beginning with the seasonal migration of trimmigrants.

    • The seasonsl migration of trimmigrants has lessened in the last few years as most growers have turned to mass production Of light dep while discontinuing the majority of their full season crop. the trimmigrants show up thinking it’s time to trim the full season In mid to late October but most black box is pulled and processed by then.

  • Timothy McVeigh's ghost

    I told you price per pounds would stabilize. Give it time…

  • And the Asians that live local and Sac Valley/Redding have fully proven themselves as the crew to bring home. If u can, do it . Because their epic work ethic, standard of cleanliness, and drama free consistency are blowing every whiny, fussy, sleep until 9, dirty local or European trimigrant out of the trimming shed as we speak.

  • My understanding is lots of letters are going out for code violations. Ive heard rumors that some of the large grows in the county are closing up shop. This alone will bring black market prices back up next year. It may actually close the gap between legal and illegal cannabis prices.

  • Haven’t paid for it in almost 50 years, never will. It’s a goddamn weed. Only use it to sleep and kill pain occasionally anyway. It’s everywhere, it will always be everywhere. Used to love that Cali Orange, though. Damn good work weed. Other than that, just for the aches and pains of age.

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