As of this writing, the San Francisco Board of Supervisors has voted unanimously in favor of Many people in the marijuana industry say the illicit market makes it impossible to make a living amid the state’s new tax reduction for legal marijuana growers.
Prop 46, which legalized recreational marijuana in California, came with a slew of promises. In the end, some of those promises have almost sunk the industry.
To avoid going bankrupt, the cannabis industry pleaded for tax reform, but now that it’s here, it’s hard to find someone happy with it.
“To stabilize the market, I intend to examine tax policy. My goal is also to awaken these municipalities to the opportunity to eliminate the illicit market. ‘ “When he presented reform intentions at the start of the year, Governor Gavin Newsom noted.
Relief came to people in the cannabis industry as a result of the decision. In any case, on Thursday, he signed a reform law he knew would not be well received.
‘It’s “The “F” word is thrown at those who are following the rules. Everything is going to hell for them “Posh Green Cannabis Boutique co-owner Reese Benton made the statement.
In 2017, she started a dispensary in the Bayview neighborhood of San Francisco. Since then, she claims, she’s regretted her decision to become a legitimate business. Excise duty is meant to be 15 percent, but an invoice from her distributor shows that Benton paid $600 for $2,300 worth of merchandise. ‘ That is 26% of the total.
Her overall tax rate is close to 35% when you include the city’s sales tax. Instead of going via Benton’s distributor, the new scheme will take money straight from her and not cut her tax rate at all. Because of the booming illegal market, she’s not shocked that her store has been shuttered.
“‘Oh, it’s cheaper on the street?’ What can I respond as a shop when people tell us that?’ Simply because I am well aware of the lower street prices. Because of this, I’m not going to get upset if they decide to spend their money there “She remarked.
So where is the industry’s tax break? The $161 per pound “cultivation tax” for growers has been halted by the state. The price of cannabis was around $1,500 at the time that the number was set. It’s now selling for as little as $300 per pound, consuming more than half of its worth.
Located in Humboldt County, Huckleberry Hill Farm belongs to Johnny Casali. Since the tax is no longer in effect, the middlemen and retailers — who stand to lose as well — have begun pressuring him to decrease his prices.
“That money will be divided and allocated between the two of them, and it will never reach the end-user. And the farmer will never be affected by it, either “Casali was the one who started it.
Because of the glut of supply and thus lower prices, he asserted that the state is to blame. According to Casali, this is why taxes on the industry are so high.
However, even though it may appear unjust, legalized marijuana was presented to voters as a means of supporting public services. “We cannot forget about that monetary promise as we strive to support the market,” Nicole Elliot, director of California’s Department of Cannabis Control, said in an interview.
“Isn’t it true that this is a delicate act of juggling? As a result, I believe that the mechanisms you see in this tax reform bill are efforts by the State to keep up with its pledge, “opined Elliot
Elliot remarked that a good compromise is one in which no one is completely satisfied. It appears that no one in the California marijuana sector, from cultivators to dispensary owners, is happy right now