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.
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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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