Well, we knew that when the state voters passed a proposition to finally legalize pot, that the pols in Sacramento would be hard-pressed NOT to tax the daylights out of the users who would flock to the state-controlled/certified retail outlets sprinkled around at the discretion of counties and chartered cities. It reminds one of the lottery arguments of years past when supporters(contractors assigned to run the machinery) cheered the stat's recognition of reality: people like to use marijuana. So, the brain trust in Sacramento put their respective pea-brains to work and put out all the rules for getting the new tax source up and running. Well, where are we today? Let's have a look.
Other states have also legalized marijuana, with their own rules, their own tax rates, and their own outcomes after years of operations. a recently published list in national media indicates that states joined the band wagon of high taxes on this formerly illegal(still illegal under federal law) vegetable substance. In the never ending quest for more, more, and more funds(it's never enough because those sitters have nothing else to do except think up how to spend more of your hard earned funds), the pols figured that given the "demand", consumers would pay any price for their preferred 'smoke'. The discussion also looks at the Canadian experience.
Our near neighbor to the north jumped in with both feet. Corporate investment surged. Old green houses were bought up and refurbished into marijuana production facilities. They have winters in Canada-good ones or 'cold' ones if you prefer. The pols heralded the investment and touted the new tax source that would benefit the masses.(promises, promises). Corporations were formed; stocks were listed and the investors piled in to reap the benefits of early run-ups of the stock prices. And then: reality arrived. Hmmmmmmm. It costs money to keep those green houses up to temp during a Canadian winter(duh?). Several companies saw their stock prices plummet.
Meanwhile, in California, home to the "Emerald Triangle", the one party government in Sacramento saw a new 'Golden Goose' among the pot farming community: "Let's go," they chortled. Time to cash in on another new legal substance. First, they need ground rules. The law specified that would take about 12 months or so to codify. Done. Rules were allowed to be set locally so county pols would feel invested in the new process of legal sales based on state regs. Each county was allowed to then formulate methods and restrictions to be followed by growers, wholesalers, and retailers. Counties were also allowed to add local taxes on top of the State's tax rate. California now has an effective rate of:
37% That's right. You've read it correctly: 37% Not 8%, not 5%, not 8.5%, not 9%, but 37% ! Hmmmmmm. How do folks react? They buy from underground sources that have a long-established marketing network. NO TAXES. What a bargain! Put that in your one party system, Gov. Gruesom.
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