High Taxes Spark Sticker Shock For Marijuana Customers In California

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Photo Credit: Jose Carlos Fajardo

A picture recently posted to Instagram shows a receipt for a shopping trip to Cookies LA, a licensed marijuana store in Maywood.

The receipt shows that the shopper bought an ounce of high-end cannabis, the maximum allowed under state law and enough to roll perhaps 40 joints.

His pre-tax tab came to $450. After taxes, the final bill was $587.25.

That receipt, and the posting on social media, are signs of the wave of sticker shock being felt among cannabis consumers.

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.”

The hefty taxes are also drawing complaints from some business owners and policy analysts who argue that the tariffs will keep the state’s massive black market for marijuana alive and well.

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.

But Keith Humphreys, a psychiatry professor at Harvard University who studies marijuana policy, is urging the state not to cave to pressure to reduce taxes rates just a few weeks after the legal market opened.

“I hope the state holds its nerve because this problem — if it even is a problem — will correct itself,” he said.

WHERE THE TAXES GO

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.

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