Despite setbacks with the dreaded NIMBY (Not in My Back Yard) policy across counties, the State of California has still managed to reach the top of the pro-cannabis movement in the U.S. As we speak, the little green plant is making its mark on the L.A. makeup industry (thanks to independent groups like Milk Kush), and growers are setting up allocations for artisan cannabis growth in Humboldt and Mendocino countries. However, this election, Californians will face a critical decision in the marijuana debate which could ultimately affect pocketbooks across the beautiful Golden State. Recently, lawmakers have provided residents six days to make a decision on the costs of cannabis taxes in California. How are people reacting and how could this impact the pot industry in our state? Let’s take a closer look at the situation and find out.
The Situation at Hand
Overall, 26 cities and counties have sent details for tax measures to voters to keep them on their toes for the upcoming election. As listed on the ballot, the cannabis taxes would range from 5% (in areas like Solvang, CA) to a staggering 15% (in locations like Atwater, CA), which constitute rates that have previously been unrecorded in the marijuana industry. Ellen Komp, deputy director of California NORML, has explained how these taxes could add up to a ban on retail sales of marijuana without the intervention of local officials.
The Negatives
Consider the fact that California’s state taxes are already staggering, so these additional costs could potentially injure the pot industry. As part of Proposition 64, California already enacted a six-layer sugar-infused cake of state, local, sales, excise, cultivation, and regulatory cost taxes. In fact, this October, 1/8 ounces of marijuana flowers skyrocketed to $100 in San Francisco, contrasting to the $50 cost in our neighbor Oregon. If pushed forward, these new taxes would create a rise in the 8.5% city sales tax.
The Positives
Surprisingly, though, these taxes could prove beneficial for the marijuana industry itself, according to cannabis consultant Sean Donohoe. Basically, if the state passes more taxes, cities could receive more support for cannabis from voters. Overall, 75% of California cities have outlawed marijuana businesses, but some parties were able to sneak into the market due to a low tax regime and early regulations.
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