California Marijuana Taxes Lower Than Expected


California’s shaky legal marijuana market is clear in Governor Gavin Newsom’s new budget. This budget shows that the state is expecting little cash from taxes collected from cannabis. A spending plan was proposed by the Democrats this Thursday and articulated that the state will receive $355 million in marijuana taxes by June. This may seem like a huge number, but it is actually half of what was expected.

Experts say that the low tax income reflects how most marijuana consumers continue to purchase weed from the illegal black market. Businesses operating in the black-market are looking to avoid taxes which add up to almost 50%.

The Future is Not all Dark

However, the experts expect the tax collections to increase gradually but approximating the amount of time it will need is proving to be a challenge. Josh Drayton of California Cannabis Industry complimented Newsom for taking a realistic approach to the challenges faced in the first year of wide legal sales.

Drayton said,” the state was a bit too ambitious on how implementing the legalized marijuana was going to work out. However, Governor Newsom has paid attention to it.”

The governor has also recommended an increase if the expenditure allocated to regulatory programs. This, however, opens up to the question whether this will be enough to assist to stabilize the marijuana economy.

The state placed a 15% levy tax on all purchases of marijuana and marijuana products including medical marijuana too. However, local governments can add on a tax on the sales and cultivation too which has led to a confusing tax rate all over the state.

Lori Ajax which is the state’s topmost marijuana regulator said that the state has initiated plans to increase licensed businesses operating in 2019. The state will also crack down all those black market retailers operating outside the law.


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