Recreational cannabis has been legal in California for almost six months now, and the state is raking in the dough from the tax revenue. A CBS Sacramento reports that in the first three months of the legal market’s operation, the state has collected a total of 60.9 million in taxes. The California Department of Tax and Fee Administration said in a report that 32 million of the state’s revenue came from the 15% excise tax on all cannabis products sold in the state.
In addition to that, another 27.3 million was obtained via state sales taxes. The last 1.6 million was the result of taxes from cannabis cultivation. All in all, the state is expected to pull in a billion dollars annually from cannabis taxes.
Are Taxes too High?
While this is bringing in the state a lot of tax revenue, some lawmakers and legalization advocates worry that the state’s high taxes will cause people to return to the black market. This could of course attract attention from the Feds, should the Justice Department decide to crack down on the legal market. As it stands right now taxes on cannabis products can reach as high as 50% in some areas of the state. Naturally this has been a concern of growers and dispensary owners, whose livelihood depend on a thriving legal market.
A bill was introduced recently to lower sales taxes for 3 years, but unfortunately was unable to make it out of committee. Assemblyman Tom Lackey (R-Boron) called it a “victory for the black market.” Regardless, the state seems poised to continue to rake in the dough. We’ll see if that tapers off, as the novelty wears off.
Source: CBS News Sacramento
Image Source: SF Chronicle
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