California Legal Marijuana Sales Fall Short Due to Taxes

[Brian4Liberty]

The legal marijuana dispensaries and growers are now complaining about cheaper alternatives (illegal, unregulated sales). State officials are complaining that they are not getting the forecasted tax revenue.

Interesting that legalization has resulted in increased prices. Home growing will obviously be the cheapest route for regular smokers. Will they ban that?

California Legal Marijuana Sales Fall Short Due to Taxes
by Chriss W. Street

The Sacramento Bee reported that estimated Proposition 64 recreational marijuana sales from California licensed retail dispensaries and delivery services for the months of January and February averaged $169.5 million per month, or about 13 percent below prior projections, according to BDS Analytics.

Despite the apparent revenue shortfall, the State of California has not made any adjustment to its sales forecast that monthly revenue will average $192.5 million for the first six months of 2018.

The first 88 California recreational marijuana dealers licensed under California’s Bureau of Cannabis Control (BCC) made big price-cuts to generate large sales volumes beginning on Jan 1. BCC told Breitbart that the number of legal dealers has since grown to 317.

BCC projected that a legal cannabis industry would grow at about the same 28 percent compounded rate as the roll-out of Internet broadband access in the 1990s. The BCC projected California legal pot revenue of $7 billion and private sector employment of 100,000 in 2018, spiking to $20.2 billion and 150,000 by 2021. State and local marijuana tax revenue collection was forecast to spike from $1 billion in 2018 to $3 billion by 2021.

But despite the initial fanfare, annual revenue for legal marijuana sales is trending at slightly over $2 billion, which means that tax collection is trending at about $291 million.
...
According to the Marijuana Rates blog, the average price for legal recreational marijuana in California is around $16 a gram or $262 an ounce. That is up from an average per gram of just $13 per gram of medical marijuana at about this time last year. The main reason prices are up by 23 percent is the 15 percent state excise and local government taxes on recreational marijuana.

Breitbart California reported in February: “California marijuana farmers that obtained legal cultivation licenses under Proposition 64 are already complaining to the Humboldt County Supervisors that taxes could bankrupt them.”

Besides Proposition 64’s excise tax on sales, the State of California is charging growers a cultivation tax of $9.25 per ounce for flowers and $2.75 per ounce for leaves. California’s legal sellers and cultivators of recreational marijuana are also now required to pay the U.S. Internal Revenue Service a steep 35 percent federal income tax rate.
...
More: http://www.breitbart.com/california/...ort-due-taxes/

[shakey1]

The legal marijuana dispensaries and growers are now complaining about cheaper alternatives (illegal, unregulated sales). State officials are complaining that they are not getting the forecasted tax revenue.

Interesting that legalization has resulted in increased prices. Home growing will obviously be the cheapest route for regular smokers. Will they ban that?

California Legal Marijuana Sales Fall Short Due to Taxes
by Chriss W. Street

Growing will no doubt cut into profit margins... likely find a way to ban.

[dannno]

Lol, I'm paying the cheapest prices I've ever heard of in my life.. I'm seeing $50-$75 ounces of seedless, pretty good outdoor bud. $60 got me a quarter of top shelf bud plus a gram of kief and a 1g pre-roll (for my whip).

Legal? Paying all the taxes? I dunno, they definitely used to be fully legal, and they still advertise on weedmaps..


An Emerging Crisis: Over Regulation of Cannabis in California
http://www.ronpaulforums.com/showthr...-in-California

[Brian4Liberty]

Unfortunately, this may undercut efforts at further decriminalization.

- Big government advocates want that tax revenue, and it is not working out for them.
- The hypothesis that legal marijuana will push out the criminal element is not working in the real world (probably due to the tax and regulate environment).

[Brian4Liberty]

Lol, I'm paying the cheapest prices I've ever heard of in my life.. I'm seeing $50-$75 ounces of seedless, pretty good outdoor bud. $60 got me a quarter of top shelf bud plus a gram of kief and a 1g pre-roll (for my whip).

Legal? Paying all the taxes? I dunno, they definitely used to be fully legal, and they still advertise on weedmaps..


An Emerging Crisis: Over Regulation of Cannabis in California
http://www.ronpaulforums.com/showthr...-in-California

So the prices have not gone up in the fully regulated shops? The complaints are no doubt coming from tourist shops that also have high overhead costs like expensive retail rents.

[dannno]

So the prices have not gone up in the fully regulated shops? The complaints are no doubt coming from tourist shops that also have high overhead costs like expensive retail rents.

From what I've heard, the only "fully regulated shops" exist in LA, Oakland and one other place I think.. Santa Cruz maybe? Could be more by now, but there are none where I live and in most of the state.

We have dozens of medical dispensaries here, those are where I buy and where it is cheap, but those are defacto illegal now because they are supposed to all comply with the "fully regulated" status, but they can't because of all the regulatory hoops.. and even if they could I don't know if they could afford the taxes, everybody is trying to tax it now.. counties, cities..

Shutting down the thriving medical industry just because they can't comply would cause riots in the streets..

[angelatc]

Growing will no doubt cut into profit margins... likely find a way to ban.

Tax stamps, already on cigarettes.

[euphemia]

Hate to say I told you so, but.....

[jkr]

Just
A
List
Of
Names

[dannno]

Hate to say I told you so, but.....

[Swordsmyth]

Good news for marijuana lovers on 4/20, a counterculture holiday celebrating marijuana.
When California began selling legal recreational marijuana in January, buyers were paying twice as much as they would have when the drug was illegal.
But consumers can expect marijuana to get much cheaper over the next year.
The cost of a gram of marijuana in that state could drop by half over the next 6 to 12 months, based on time lines in other states that have legalized the drug, according to an analysis of price data from cannabis analytics platform Headset.

More at: https://www.marketwatch.com/story/th...ion-2018-01-04

[euphemia]

This is exactly what happens when government gives permission for something that is part of fundamental liberty.

[dannno]

This is exactly what happens when government gives permission for something that is part of fundamental liberty.

Well things were a lot better when it was legal medicinally than it was when it was totally illegal. I dunno if you've ever waited around for your drug dealer to call you back, then found out 3 hours later they are dry and aren't going to have any for another week and your other dealers are dry all of a sudden when two weeks ago everything was flush.

Then there is the issue with cops. They don't care if they smell weed anymore, they don't treat it like crack cocaine. When medicinal got popular they stopped treating it like you had a firearm pointed at them, and now I'm pretty sure they really just don't care at all.

But ya, there are some major issues, or growing pains. But overall it will be better than when having a gram of weed was worth the cops breaking down your front door and destroying all of the belongings in your house.

[euphemia]

I’m not a user and never have been. I do not like the argument that we need permission from government to grow or use anything on our own property.

[Zippyjuan]

The market has been slowed by local jurisdictions either limiting businesses or trying to ban them in their community or simply having troubles coming up with rules for marijuana shops. Taxes don't seem to be the issue.