California taxation is killing the legal pot industry
Not really a surprise, is it?:
Leading California cannabis companies warned Gov. Gavin Newsom on Friday that the state’s legal industry was on the verge of collapse and needed immediate tax cuts and a rapid expansion of retail outlets to steady the shaky marketplace.
The letter signed by more than two dozen executives, industry officials and legalization advocates followed years of complaints that the heavily taxed and regulated industry was unable to compete with the widespread illegal economy, where consumer prices are far lower and sales are double or triple the legal business.
It’s partly the taxes, of course. California is well known for that sort of thing. But the reason there aren’t more dispensaries is that localities often vote against them. Are the letter-writers proposing the government force towns and cities to allow dispensaries that they don’t want? I don’t see how else it could happen.
If I recall, and from what my brother who still lives there tells me, the Colorado black market for pot exploded after the legalization. All to avoid the state taxes.
https://alchetron.com/cdn/pugsley-addams-c3bce0b2-5a1d-4fc0-9965-651ccac23d3-resize-750.jpg
Addendum: I do sympathise with people who went into debt to establish these businesses.
Good.
You want weed? You gotta break the law to have it.
As it should be.
Damn straight. If it’s legal, why bother smoking it?
It’s pretty hard to tax and regulate something that will grow in every back yard and vacant lot. I think conservatives pointed this out, but the California legislature is not overloaded with common sense.
Kate:
The thing about legal marijuana in California is that it is of a certain guaranteed potency and balance of active ingredients. You don’t get that with illegal marijuana.
Decriminalization for medical and adults: yes. Legalization: no.
Offhand I’d say that no consumables should be taxed.
Private companies can easily provide independent 3rd party verification of guaranteed potency and balance of active ingredients. If consumers demand it and effectively boycott growers and distributers who fail to provide that guarantee, they’ll either get with the program or go out of business.
A mentally healthy population has no need of supervision. Which starts with a mentally and morally healthy culture. Mentally and morally healthy parents raise mentally healthy children grounded in moral principles that can be rationally defended.
Neo, while in theory the legal stuff is more consistent, lots of illegal users got pretty good at judging most aspects of illegal pot. And neither customer/ addict nor pusher really wants the illegal stuff to be much worse than the legal stuff.
Yes, if overdoses were to increase from 1/100 of a 1% (0.01%), up to 0.1% that would be 10x worse – but still very small. OD seldom happens with pot – far more often with other, more dangerous drugs.
There’s a thriving illegal cigarette smuggling from Ukraine to Slovakia (& EU) to avoid the high taxes on smokes. The non-taxed illegal market is always a practical limit on “vice taxes”. Including prostitution & gambling, as well as cigarettes & pot & especially alcohol.
There’s certainly a “Laffer curve” relationship between total revenue & tax rates – at the top of that curve, higher rates reduce revenue thru a larger reduction in taxed use. [Laffer wrote about income taxes]. CA should be reducing tax rates — to get more cash from more folk using the “higher quality, but much higher priced legally taxed” pot.
It’s very very sad so many people want to mess with their minds. But they do. [Wife & I disagree on this, one of very few significant disagreements. We both want fewer drug addicts AND fewer corrupt cops & robberies; and lots of personal responsibility]
… Monkees’ Saturday Child – better than remembered
https://www.youtube.com/watch?v=luhV609wAes&list=RDXJJL-clqdfU&index=27
This is hilarious. I predicted this when the whole thing began and I still lived in CA. The people who buy and smoke pot are not the brightest bulbs around but they can figure out what is cheaper.
Are the letter-writers proposing the government force towns and cities to allow dispensaries that they don’t want?
As Californians and we Washingtonians know, our dear Governors have discovered the gimmick – declaring an ’emergency’ – which immediately crowns them King for as long as the ’emergency’ suits their purposes. I wouldn’t put it past their current Gov to decide that immense benefits would be conferred on all of those recalcitrant municipalities who voted wrong on the MJ dispensaries, and that the local nays be overruled by some wise diktats of a recently-unrecalled overlord in Sacramento.
Neo, for many users, the variability in quality will be less important than the price.
I’m remembering a generation ago Eleanor Clift assuring the McLaughlin audience that legalizing drugs would ‘take the profit out of it’.
While we’re at it, whatever happened to Ethan Nadelman?
Kate:
Of course.
I was just pointing out that legal marijuana has some advantages despite the price.
What is missing from the legal argument in California is the flood of Cartel Pot Farms that have taken over the southern mid-valley. They number in the hundreds and are huge and well funded and out producing the legal farms in the tonnage. They are also rapidly draining the aquifers and putting strain on the regular farming communities. A few weeks ago, there was a Sheriffs Dept. raid using Cats and dump trucks to bust up one of the Cartel farms.. the pics were amazing.. no wonder the legal growers are worried.. note: the border is wide open!
All i know is that many moons ago, 1977ish, it was 35-40 for 1 ounce……….and it worked for me. Now that same ounce on the street in the chicago area is roughly 200-300, and in a dispensary about 400-500 (including taxes, fees).
On the street its kind of like Lets make a deal, but you only have 1 door to choose but rarely if ever is it bad (these days). DIspensaries are overwhelming with options. So many different adjectives describing highs. Silly really. But its definitely better tasting and prettier. And smells like a skunk most times.
and theres 2 kinds….Indica…………In da couch weed (body high)
and sativa…..more a head high (they say)
ha, yeah, ok, whatever. We just had Mexican, Columbian, Colombian gold (kinda like bud and michelob), never had Acapulco Gold, but cheech and chong did.
No stems or seeds that you dont need…………..Acapulco Gold is bad ass weed.
Sinsemilla started the whole cultivating craze about 1982ish…..it was seedless, more expensive, better, and that was about 100/ounce
Then the Maui Waui era which I think was more Kenticky pot in a can. They were plussing it like Disney.
sorry, all over the place, reminiscing.
but I love telling the kids, in my day pot was 35/oz…………then they look at me weird like, shut up Boomer.
Then I tell them, oh yeah, I saw Led Zeppelin. And Queen. And the Who. Sucker.
They dont care.
I’m remembering a generation ago Eleanor Clift assuring the McLaughlin audience that legalizing drugs would ‘take the profit out of it’.
Well it would take the vast profits that the criminals make from it, it it were taxed at a normal rate.
You can’t blame Clift for California doing a half-assed job of it.
And the dispensary problem would go away if you could order it by mail, like almost any other product.
Again, a restriction merely for the sake of it.
Allow me to file this under, “Oh, well.” There is about a thousand things, organizations, people I would worry about before worrying about the cost of weed , etc. Except that the foreign Cartels are being allowed to set up shop. That I care about, under the broader banner of national security.
My neighbor has been growing organic for years in Mendocino county. But independent growers are hurt, crippled, because of the testing and permits. They have to test each plant. And the clones are taking over the market.
Arizona went recreation legal last year. Now in the Phoenix metro you’re never more than a mile from a store. I was in one last week that looked like a high end jewelry store, and the “budtenders” all wore black slacks and long sleeve white button down shirts. There were no visible tattoos and the only odd hair color was a couple of blonde streaks in the hair of the lone female worker. This store was in a wealthier part of town.
And oh, the variety. Waxes, liquids for vaping, edibles, pre-rolls (a joint with specified variety and strength) buds, butters, and one store here will sell you weed brownies and weed pizza.
I was in Mexico recently talking to a friend. I mentioned that I had been offered every drug one could name, except weed. He told me that no one wants Mexican weed because the US farms produce exactly the strains, strength and forms they want. In Mexico, he said, you throw seeds in a field and pray.
Over 50 percent, probably 66 percent, of customers are women. Gals in their 20s who want to get frisky, and gals over 40 who want relief from anxiety.
Here is one interesting difference: when they legalized it last year there was a provision that set aside 25 licenses for people with weed possession convictions.
One of the pot growing companies will provide them with assistance and funding to open their dispensary. I met a guy outside Walmart with a tablet who was recruiting folks to get in the lottery. He wanted to sign me up but I had failed to plan ahead and get busted by the man, man.
it’s just cali being cali. nothing works here, the government just banned small generators – in a state with frequent power outages!
The potency ratings of “state legal” weed by percent of THC are a joke. There is no way to really make an accurate measurement the way they can gauge the amount of alcohol in a blended whiskey.
And CA had an excellent system under the old medical marijuana program. Those who wanted to smoke, got the card. The extra step of getting it kept a lot of lowlife, and riff-raff out of the dispensaries.
No one in CA who took five minutes to look at the recreational proposition on the ballot voted for it. Just one more case of vote fraud in this crooktopia. It essentially just allowed the state to do to weed what they did to tobacco, which is to tax rape the whole industry out of business. The genius crowd in Sacramento never considered that the weed business was bred and born in the black market. Actually, they did the consumer a favor. In the old system, an oz. of top grade would run about $320.
State legal weed can cost over $500. per oz.
Now there are gray market, speakeasy shops like the one just a half mile from my house. The cops have way better things to do than bother with them.
Same stash there runs $270. per oz. No tax.
JWM
Used to be said, in the South, that the Baptists and the moonshiners were allies against legalized liquor.
I mentioned that over half of the dispensary customers I see are women. There’s a lot of gals who will cheerfully buy from a legal store and who are not eager to do a street deal.
It’s very difficult to tell if the employee outside vaping on her break is enjoying nicotine or THC.
Five hundred an ounce? No wonder the loons are all over it.
And I guess the potency, according to a source supposedly in the know, is 5 times what is was in the days of yore and Led Zepplin 3.
In a certain Midwestern state – the one governed by Mrs Lurch – citizens are now allowed to grow a limited number of domestic plants. How high and how long a dozen( if anyone is actually counting) backyard plants would keep a craving pot head satisfied, I cannot begin to guess. But some of these homegrown plants raised in decorative clay pottery are spectacular in size and rather attractive looking.
I was offered some commrcially developed plants and turned them down. They look like green castor bean plants when grown large to me. The pot expert denied it. “No, nothing like similar.” Yeah, ok.
Maybe I should have accepted them. If civilization is going to collapse why not give it a little push, eh? I could sell it to the addicts in their rags. Like marketing bullets to the suicidal. But since they seem so determined to have it.
And yes re women. I have been staggered by the intensity of the positive feelings expressed for pot on the part of some middle aged women. It’s MEDICNE!!! Who woulda thunk it.
My information source says they are rapidly developing strains that have the pain relieving oils but nothing to get you high.
It will be fun to watch how that plays out when that is offered exclusively to those needing their “medicine”.
Gee, I really ought to look into how many ounces 6 ft tall plant would deliver.
After civilization collapses and my tractor runs out of diesel, maybe I can get the addicts to pull the plow for pot until such time as the Amish guys down the road breed more mules, and my methane generator comes on line.
Of course my source of info who is tied to a commercial operation informs me that to get the best results with her patio plants a great deal of care and nurturing is required.
Sounds like a bloody lot of work.
And in the case of the commercial operation, well, that particular venture is set up with all the care and attention to micro detail of an Israeli tomato farm.
So maybe it is not “free money” just lying there, waiting for you to stoop down and pick it up.
Well it would take the vast profits that the criminals make from it, it it were taxed at a normal rate.
I’m getting a vision of Sam Kinison:
“I’d buy it every time; I swear I do. I buy it every time. I love women; I can’t help it. I’d buy every time love comes to me and goes, “C’mon. C’mo-ha-ha-ha-on. Yes, this is love. Yeaaaah, c’mon. Trust it. I know you been in love before- THIS IS LOVE. I wouldn’t lie to you eight times in a row. C’mon. C’mon, open the door, let’s see what we have for you.”
Click-click-errrrrrrr…
LOOK OUT! AAAAAH! YOU LIED TO ME AGAAAAAAIN!
I have been staggered by the intensity of the positive feelings expressed for pot on the part of some middle aged women. It’s MEDICNE!!! Who woulda thunk it.
They’re too embarrassed to buy the real stuff:
https://images.heb.com/is/image/HEBGrocery/000630557
About 50 years ago I lived in Nebraska. We moved into a new area in along the Missouri and our house was like the 4th one on the street to be completed. Down the street 4 or 5 blocks was an old hemp farm that had been planted during WW2. To us kids it was a 5-acre pot forest of plants 8-10 feet tall. We had trails all over the place. The high schoolers called the variety “Nebraska No-High”. Then the sheriff’s department came in destroyed it. But it is a weed and it grew back the next summer. So, they nuked it with Agent Orange or something and that was the end of the pot forest.
https://drugpolicy.org/staff/ethan-nadelmann-founder
Ethan Nadelmann is still plugging away. Other photos available indicate he’s shaved his head.
One of the arguments “for” was that legalization would free up all the narcs to deal with real crime, since they didn’t have to waste time on grass sales. Now the cops are free to deal with robberies and burglaries at the legal shops AND pursue the bandit growers who are out in the woods growing the black market stuff…. as well as still cleaning up the bodies from “business disputes” among the marketing divisions. The move did the opposite of what was claimed.
Ken– Not only generators, but mowing equipment and chainsaws. My former neighbors there have been busy clearing roads and driveways of downed trees due to the recent storms. Without their chainsaws they would be house bound; and uncut grass (multi acres of it) are a fire hazard. So glad I moved out.