California pot taxes lag as illegal market flourishes

[Peter1469]

California pot taxes lag as illegal market flourishes

If California was ever tough on marijuana growing and distribution before it was legal, I bet California will go all out now that they are losing serious tax dollars because illegal pot appears to have under-bid legal pot.

Deep in Gov. Gavin Newsom’s new budget is a figure that says a lot about California’s shaky legal marijuana market: The state is expecting a lot less cash from cannabis taxes.

The Democrat’s proposed spending plan, released Thursday, projects the state will bank $355 million in marijuana excise taxes by the end of June. That’s roughly half of what was once expected after broad legal sales kicked off last year.


Industry experts say the diminished tax income reflects a somber reality: Most consumers are continuing to purchase pot in the illegal marketplace, where they avoid taxes that can near 50 percent in some communities.

Someone once said if you want less of something, tax it.

[Helena]

Morons.

They didn't listen when the legalizers were arguing with the other legalizers about just exactly this.

[Common]

As I predicted time and time again. Illegal weed would flourish because it will be much cheaper than legal weed.


Deep in Gov. Gavin Newsom’s new budget is a figure that says a lot about California’s shaky legal marijuana market: The state is expecting a lot less cash from cannabis taxes.
The Democrat’s proposed spending plan, released Thursday, projects the state will bank $355 million in marijuana excise taxes by the end of June. That’s roughly half of what was once expected after broad legal sales kicked off last year.


Industry experts say the diminished tax income reflects a somber reality: Most consumers are continuing to purchase pot in the illegal marketplace, where they avoid taxes that can near 50 percent in some communities.


Tax collections are expected to gradually increase over time, but predicting what that amount will be remains something of a guess.


Tax collections for “a newly created market are subject to significant uncertainty,” the budget said.


Josh Drayton of the California Cannabis Industry Association credited Newsom with taking “a realistic look at the challenges” after a bumpy first year of broad legal sales.


Newsom also recommended a sharp increase in spending for regulatory programs, although it’s an open question whether it will be enough to help steady the state pot economy. The budget recommends just over $200 million for marijuana-related activities in the fiscal year that starts July 1, which would be over a 50 percent boost from the current year.



https://apnews.com/37866c4831844c5f8b82ddd87c2fe7c6

[Trish]

This is a good test on capitalism.

[Lummy]

Hilarious.

[stjames1_53]

free market...............they should be more competitive with the illegal dealers...........

[MisterVeritis]

This is a good test on capitalism.

True. It shows the free market exists.

[zachroidott]

They should make it illegal, again. lulz

[Tahuyaman]

As I predicted time and time again. Illegal weed would flourish because it will be much cheaper than legal weed...

Here in Washington the legal weed is not expensive. The illegal market here is pretty much irrelevant.

California must be screwing it up.

[Tahuyaman]

This is a good test on capitalism.

I agree. Government can screw up just about anything.