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California’s already unstable legal cannabis industry could be in for even more trouble.
SFGate reports that the state’s cannabis tax rate is set to increase from 15% to 19% in July, which doesn’t bode well for an industry already struggling with issues such as pesticide contamination.
One Los Angeles dispensary owner said this could be a “tipping point” that would destroy even more legal businesses, as additional local taxes in Los Angeles could bring the total tax on marijuana to 50%. It’s sexual,” he told the outlet. .
Jared Kilo, owner of Hire Pass Dispensary in Sherman Oaks, said high taxes are already pushing many consumers to the cheaper illegal market.
“The under-35 demographic is so agile that they can quit the legal industry with just an Instagram post,” Kilo told SFGate.
Justice Department moves to reclassify marijuana. What happens next?
Cannabis sales in 2023 are reported to be $5.1 billion, but unpaid state taxes alone amount to a quarter of that amount, or $1.3 billion, SF Gate found.
Adding to the tax battle is a special regulation that would increase cannabis taxes by 50% if late, compared to 10% for other types of businesses.
It’s unclear whether anything can or will be done to help the legal cannabis industry, but one thing is certain: the clock is ticking.
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