California to tax pot as much as 45%
CNN
http://www.kcra.com/article/california-to-tax-pot-as-much-as-45/13128719
Buying legal marijuana in California could be pricey enough to keep the black market healthy.
Between customers, retailers and growers, taxes on cannabis may reach as high as 45% in parts of the state, according to a Fitch Ratings report. Those high taxes may keep consumers away from legal marijuana stores once the recreational retail market goes live on January 1.
"High effective tax rates on California cannabis may complicate the state's efforts to establish legal markets" said analysts Stephen Walsh and Karen Ribble in a Fitch Ratings report on California's marijuana taxes.
California marijuana consumers are going to have to pay a combination of state and local taxes that vary by municipality. Growers and sellers have their own taxes, too.
Consumers will pay a sales tax ranging from 22.25% to 24.25%, which includes the state excise tax of 15%, and additional state and local sales taxes ranging from 7.25% to 9.25%.
Local businesses will have to pay a tax ranging from 1% to 20% of gross receipts, or $1 to $50 per square foot of marijuana plants, according to the Fitch report.
In addition, farmers will be taxed $9.25 per ounce for flower, and $2.75 per ounce for leaves.
The Fitch report says this combination of state and local taxes for consumers, retailers and growers could keep portions of California's cannabis industry off the grid, where it has flourished for some time.
"California's black markets for cannabis were well established long before its voters legalized cannabis in November 2016 and are expected to dominate post-legalization production," said the Fitch report.
Among the eight states where recreational marijuana is legal, only Washington has a higher tax rate at about 50%.
Colorado and Nevada both follow with rates of 36%. Oregon has a tax rate of 20% and Alaska has a rate of up to 20%.
Medical marijuana has been legal in California since 1996, but the retail markets for recreational marijuana are just now ramping up and are scheduled to begin on New Year's Day.
Retail: Corona beer company is investing in Canadian cannabis
Black market farmers already face considerable obstacles to becoming compliant with state law, even without the taxes.
Van Bustic, a specialist in the environmental impact of cannabis cultivation for Berkeley's College of Natural Resources, said that registering with the state and becoming compliant will cost about $100,000. He said that many Humboldt farmers are unlikely to shoulder that cost if they can continue to operate in the dark.
The Fitch report says the black market could prove to be a "formidable competitor" to legal weed, if taxes push prices significantly higher than illegal, tax-free pot.
Other analysts agree that high taxes could actually be a boon to the black market.
"If taxes increase the price of cannabis beyond a certain point, the legal market becomes less competitive than the illicit market and then consumers become less likely to make the transition from the illicit market to the legal market," said John Kagia, analyst for New Frontier Data, which tracks the cannabis industry.
The Fitch report says this dynamic has already prompted Colorado, Washington and Oregon to lower their "initially uncompetitive" tax rates.
"It's almost certain that all of the states with recreational marijuana still struggle with the black market for marijuana because of its prevalence before legalization," said Morgan Scarboro, a policy analyst for the Tax Foundation's Center for State Tax Policy.
She said that high tax rates "will prevent the minimization of the black market" and that state governments "need to be open to evaluating their marijuana tax structures."
Related: Retail weed is spreading to California, Massachusetts, Maine
Colorado, Washington and Oregon have tried various tax structures, with mixed results, according to Kagia.
Oregon started in 2015 with a weight-based sales tax of $35 per ounce but changed that to a percentage sales tax of 20%.
Colorado got rid of a 2.9% sales tax but rose its excise tax from 10% to 15%, effectively raising its tax rate.
Washington started out with a 25% tax rate on producers and another 25% on processors, in addition to a 25% sales tax. Officials changed that to a 37% flat sales tax for cannabis that's in addition to standard state and local sales taxes.
"The only state that we know of that has undertaken a radical tax transformation is Washington," said Kagia, but he added that Washington still has the highest cannabis sales tax in the country.
Of the eight states where recreational marijuana is legal, three, including California, haven't yet started retail markets.
Massachusetts is expected to have a tax rate of 24% when it starts up its retail market in July of 2018, according to the Fitch report.
Maine has not yet established its tax rate.
Top of Page Bottom of Page PermalinkFull Name: ________ Heybrochacho
on Tuesday, October 31, 2017 – 05:11 pm
Yay government
Yay government
Top of Page Bottom of Page PermalinkFull Name: New & Improved nedb
on Tuesday, October 31, 2017 – 05:20 pm
Is there someone we can blame
Is there someone we can blame?
Surely there's someone we can blame.
Top of Page Bottom of Page PermalinkFull Name: Oaksterdam Dan Nugstradamus
on Tuesday, October 31, 2017 – 05:38 pm
greed???
greed???
Top of Page Bottom of Page PermalinkFull Name: New & Improved nedb
on Tuesday, October 31, 2017 – 05:41 pm
I wouldn't describe Colorado
I wouldn't describe Colorado's 25% retail pot tax, which goes exclusively to brick/mortar school buildings, as greed.
Is the CA grower's profit greed, too?
Top of Page Bottom of Page PermalinkFull Name: Hitchhiker awaiting "true call" Knotesau
on Tuesday, October 31, 2017 – 05:42 pm
Top of Page Bottom of Page PermalinkFull Name: thinthread hillman
on Tuesday, October 31, 2017 – 05:46 pm
why so outraged? you knew
why so outraged? you knew this was coming, you're fucking california for crying out loud. i bet it goes higher eventually.
Top of Page Bottom of Page PermalinkFull Name: Bluelight Odysseus
on Tuesday, October 31, 2017 – 05:47 pm
CNN is not reporting this.
CNN is not reporting this today.
Smoke up, for now.
Top of Page Bottom of Page PermalinkFull Name: Sun so hot, clouds so low Trailhead
on Tuesday, October 31, 2017 – 05:52 pm
Fake news. Sad!
Fake news. Sad!
Top of Page Bottom of Page PermalinkFull Name: Oaksterdam Dan Nugstradamus
on Tuesday, October 31, 2017 – 05:57 pm
Confusion coming with
Top 5 Predatory Practices In California Cannabis
Do your due diligence, lest you waste your time and money.
By HILARY BRICKEN
Oct 30, 2017 at 4:20 PM
https://abovethelaw.com/2017/10/top-5-predatory-practices-in-california-...
Top of Page Bottom of Page PermalinkFull Name: Painted Mandolin Treblemaker
on Tuesday, October 31, 2017 – 06:14 pm
Save your grass cash and take
Save your grass cash and take a weed vacation to Reno:
http://www.greenstate.com/food-travel/a13087776/nevada-marijuana-guide-h...
Top of Page Bottom of Page PermalinkFull Name: charmskooldropout hounder
on Tuesday, October 31, 2017 – 06:16 pm
I can't believe nugs didn't
I can't believe nugs didn't see this coming.
Top of Page Bottom of Page PermalinkFull Name: Hitchhiker awaiting "true call" Knotesau
on Tuesday, October 31, 2017 – 06:16 pm
Some of my customers have
Some of my customers have their own vineyards.
Top of Page Bottom of Page PermalinkFull Name: thinthread hillman
on Tuesday, October 31, 2017 – 06:29 pm
at least you get to have
at least you get to have legal weed. VA is right next door & they are talking about decrim for small personal amnts. TN will be the last fucking state in the country to allow it
Top of Page Bottom of Page PermalinkFull Name: Oaksterdam Dan Nugstradamus
on Tuesday, October 31, 2017 – 06:30 pm
seen it coming pounder just
seen it coming pounder just trying to alert CA growers to issues
Not everything is about me
Top of Page Bottom of Page PermalinkFull Name: Highnote Stringtwang
on Tuesday, October 31, 2017 – 06:47 pm
Grow your own.
Grow your own.
Top of Page Bottom of Page PermalinkFull Name: Oaksterdam Dan Nugstradamus
on Tuesday, October 31, 2017 – 08:16 pm
<<<<TN will be the last
<<<<TN will be the last fucking state in the country to allow it
Hillman just get it at Bonnaroo's open air drug market
Top of Page Bottom of Page PermalinkFull Name: Skitime Wngfan
on Tuesday, October 31, 2017 – 08:21 pm
Taxes certainly increased the
Taxes certainly increased the prices in Oregon for the legal crop. Prices are starting to drop (saw some $88 ounces last week), but the quality at the mid and lower prices is crap compared to what was average weed just 8 years ago. The top shelf still seems to be going for $40 an eighth.
Top of Page Bottom of Page PermalinkFull Name: An organ grinder’s tune Turtle
on Tuesday, October 31, 2017 – 08:38 pm
anyone can grow mediocre weed
anyone can grow mediocre weed.
top shelf, not so much.
Top of Page Bottom of Page PermalinkFull Name: bweir I like cheese jklowan
on Tuesday, October 31, 2017 – 09:35 pm
what constitutes "top shelf"
what constitutes "top shelf" weed, might need samples to understand :)
Top of Page Bottom of Page PermalinkFull Name: Def. High Surfdead
on Tuesday, October 31, 2017 – 10:23 pm
I don't have any shelves - I
I don't have any shelves - I keep it on the floor.
Top of Page Bottom of Page PermalinkFull Name: _ ender
on Wednesday, November 1, 2017 – 09:30 am
...
Top of Page Bottom of Page PermalinkFull Name: GravyTrain Gravytrain
on Wednesday, November 1, 2017 – 12:06 pm
Making tax-free homegrown
Making tax-free homegrown hash this weekend.
They’ll have to take it outta my cold, dead hands....
Top of Page Bottom of Page PermalinkFull Name: Jay Siobud
on Wednesday, November 1, 2017 – 12:38 pm
>>The top shelf still seems
>>The top shelf still seems to be going for $40 an eighth.
Seems fair IMO. I have a few friends who grow and I usually get my oz for 175-200. Seems reasonable when you factor in all the overhead costs they incurr.
Top of Page Bottom of Page PermalinkFull Name: Def. High Surfdead
on Wednesday, November 1, 2017 – 12:50 pm
There's just so much here in
There's just so much here in OR. We grow 25% plus THC buds and we can barely give them away. Not sure why you can't get this kind of quality in the store.
"Naw, I got too much - do you want some?"
Top of Page Bottom of Page PermalinkFull Name: jazfish Jazfish
on Wednesday, November 1, 2017 – 03:44 pm
I need a sativa, tired of
I need a sativa, tired of sleepy smoke.
Top of Page Bottom of Page PermalinkFull Name: surjade Treeflo
on Sunday, November 5, 2017 – 03:26 pm
Something like this....
Top of Page Bottom of Page PermalinkFull Name: surjade Treeflo
on Sunday, November 5, 2017 – 03:32 pm
"There's just so much here in
"There's just so much here in OR. We grow 25% plus THC buds and we can barely give them away. Not sure why you can't get this kind of quality in the store."
My guess is non compliant growers without resale licenses and / or residual Myclobutil may play a part.
Top of Page Bottom of Page PermalinkFull Name: 19.5 Degrees FaceOnMars
on Monday, November 6, 2017 – 08:50 am
I wouldn't describe Colorado
I wouldn't describe Colorado's 25% retail pot tax, which goes exclusively to brick/mortar school buildings, as greed.
Is the CA grower's profit greed, too?<<<
Then what do you call it?
Can you at least agree to call it unfairly disporporationate to other comparable "sin taxes" (i.e. alcohol)?
Top of Page Bottom of Page PermalinkFull Name: 19.5 Degrees FaceOnMars
on Monday, November 6, 2017 – 08:52 am
funny how you're OK with the
funny how you're OK with the government using only minimal regulation at ski areas - allowing billionaires to profit off of public resources, yet you seem to be perfectly OK with gross gross gross over taxation/regulation on the pot front