Blame Game Begins in California Cannabis Market
Each day brings new conflicting headlines as America struggles to understand the booming cannabis industry and how to assimilate its potentially huge profits into everyday society.
A May 9th story by Marijuana Business Daily boasted that domestic cannabis sales were set to top $10 billion this year and more than double that mark in just the next four years to a projected $22 billion in 2022.
Sounds great to anyone even tangentially involved in the industry, but then the very same news outlet reported later in the week that embarrassingly low tax revenue totals being generated by California’s new recreational cannabis market have the state’s lawmakers nervous and likely unwilling to provide any tax relief in near future legislation.
Maybe you have been to a legal cannabis shop in Cali since the passing of Prop64 in 2016.
Maybe you have almost had a heart attack when you got rung up at the register and saw how much was added to your bill for taxes – up to 30% EXTRA on average
Maybe you had hopes of getting some cannabis related tax relief from your elected officials.
That hope pretty much went up in smoke when the 1st Quarter revenue reports came back and showed that California was severely lagging behind and was nowhere near halfway to its stated goal of hauling in $175 million by June. Three months in, Cali’s coffers had only collected around $34 million.
So taxes are way too high for the average consumer, but tax revenues are way too low for the authorities to keep looking the other way on weed…so, what gives?
On one side you have the heart and soul of the legal industry – the growers and manufacturers…the makers.
They are fed up due to overbearing regulations, fees, and oversight by agencies who don’t know a pot plant from a petunia. They are being forced to continually lower their well-established prices to compensate for the taxes that hammer the consumers in order to stay competitive against a thriving black market.
Many are just calling it quits and leaving…or sliding back into that grey area between California’s clunky medical and recreational cannabis laws.
On the other side you have the authorities who are blaming everyone but themselves and their incredibly flawed rollout of the incredibly flawed Prop 64. The main focus or their ire seems to be aimed at the black market, and Gov. Jerry Brown recently announced funding for task forces with orders to take down the most egregious underground operations.
Chris Beals is the president and general counsel for Weedmaps.com and has his finger directly on the pulse of the quasi-legal cannabis market in Cali, since most of it relies on his technology.
He estimates that 85-90% of those in business last year (before regulations took effect) are still in business today unlicensed.
The ridiculous amount of layers of regulation and red tape attached to Prop 64 have not even been fully realized yet, with more bottlenecks and clusterfucks to come as the state tries to somehow oversee seed-to-sale tracking, GPS-tracked distribution, and other ideas that might work this year if they had started working on them 10 years ago.
So who is to blame?
Prop 64, that’s who.