Early Marijuana Results from California are in: Black Markets to Continue
Did a little research at the cannabis store. Adult-use sales for recreational purposes have commenced in California. I noticed that the taxes were 19% for medical stuff prior to Jan 1, but now there's no "medical" option and taxes across the board are 34.25%!!!!
This includes our already crazy sales tax of 9.25%.
This ensures there will still be a thriving "black" market, as consumers will look to avoid the ghastly tax, and the police (hopefully) will be very lax for marijuana possession type issues.
I knew a guy who operated a medical dispensary, legal, above board.
But his own side business was selling weed on the black market.
There will be a lot of non "dispensary" sales.
It will be interesting to see how it plays out.
And your point that medical users basically don't get a discount sucks.
This is something that the legislators just don't understand. I, as a consumer, don't have much of an incentive to follow the law and pay a 34% tax rate on a $20 purchase. It's an unnecessary upcharge just to follow the law. A reasonable sales tax would be more acceptable but this is ridiculous to see. It de-incentivises sales and therefore reduces tax revenue compared to keeping it lower at the same rate as alcohol/food in general. My fear is that they'll be too stupid to realize the loss of revenue is from this tax and then they'll increase the tax to combat it; doubling down on a poor decision.
This will surely let the Black Market fester.
Excessive taxation is akin to prohibition and will cause many of the same problems of tax evasion and violent black markets.
Blackmarket has its own rules I guess. People continue to buy and sell things even if the government puts a ban on it.
Im on my way to California the Thomas fire delayed my trip!!