Recreational marijuana has been available for sale in California since January 1st, but it has had many expected stumbling blocks. The illegal marijuana market still persists with plenty of strength and current California dispensary taxes are likely to keep it strong for a while.
Receipts from California marijuana shop consumers have been popping up all over social media showing the 20% in taxes people are paying. With the prices currently being charged for California marijuana, the black market will be able to persevere without much of a problem and the fact that people are taking the time to post their receipts is certainly a sign of their discontent.
Many shoppers have been surprised by the tax rates that have taken effect since Jan. 1, when recreational cannabis sales became legal. Some of the receipts shared online include bright red circles around the tax line and are posted with hashtags like “#californiaisscrewingus” and “ididntvoteforit.”
During a recent meeting in Sacramento, the state’s new Cannabis Advisory Committee agreed to discuss taxes at a future session. And Rich Miller, president of the American Alliance for Medical Cannabis, asked the state to consider reducing the tax rate for seniors and medical patients.
All cannabis legally sold in California now comes with a 15 percent excise tax. On its own, that rate is in line with, or below, the tax imposed in most other states that have legalized recreational cannabis.
But in California, that excise tax is just part of the tax bill. Most California cities that allow marijuana stores have tacked on local taxes, typically 5 to 10 percent. In a few cities, the local rate is as high as 15 percent. That’s in addition to the regular sales tax, which typically runs between 8 and 10 percent.
Bottom line: Medical marijuana consumers are generally paying at least 20 percent tax on every purchase, and recreational consumers are paying between a low of 28 percent and as much as 40 percent.
If one of the most important parts of the legal marijuana market is to make buying legal marijuana more appealing than black market marijuana, then prices will have to be more than competitive. Do you think that California will lower marijuana taxes, or will dispensaries lower their prices on cannabis?
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