California may temporarily lower dispensary taxes

By Cara Anderson
IG: @carajojo

California Legislators propose a temporary tax relief to protect legal recreational dispensaries from being undercut by the black market.

Legal dispensaries want to be able to effectively compete with unlicensed dispensary prices, and California’s current taxes are not allowing it. In some cases, according to Fitch credit agency, the combination of local, grower’s, and sales taxes have raised the cost of cannabis by 45%.

Temporarily lowering the state excise tax from 15-11% will allow legal businesses to lower the overall cost of their products. Legislators are also considering suspension of the  $148/lb cultivation tax.

“Criminals do not pay business taxes, ensure consumers are 21 and over, obtain licenses or follow product safety regulations. We need to give legal businesses some temporary tax relief so they do not continue to be undercut by the black market.” – Assemblyman Tom Lackey

The high cost of licensing and taxation is a deterrent for many unlicensed business owners; some 900 unlicensed dispensaries in California have been sent notice to cease operations without proper licensing.

“…most unlicensed dispensaries are unable to obtain a permit because of the ridiculous qualifiers that the state requires for a license, such as $300k in liquid assets. The strict requirements serve to take 90% or more of the small cannabis businesses out of the game permanently and pave the way for corporate cannabis to dominate the industry with controlled approved growing, manufacturing, and pricing of marijuana and taxes that are expected to increase exponentially in the coming years.” – Medicinal Michael Boris, Weedmaps Under Attack


Featured image by @mjaysocal