High taxes on legal marijuana in California could have the potential to turn many consumers away from the state’s cannabis shops and toward the black market, according to a report from Fitch Ratings. These high tax rates have the potential to drive customers toward the black market. The credit rating agency estimates state and local taxes on marijuana, which will become legal in California on Jan. 1., could be as high as 45 percent in some cases. Business taxes on recreational marijuana have been approved by voters in 61 California cities and counties, according to the report. The report says that legalization brings extremely high stakes for parts of the state, including the so-called Emerald Triangle in northern California.
High taxes on legal marijuana in California could have the potential to turn many consumers away from the state’s cannabis shops and toward the black market, according to a report from Fitch Ratings.
The credit rating agency estimates state and local taxes on marijuana, which will become legal in California on Jan. 1., could be as high as 45 percent in some cases. It would trail only Washington state, which levies a 50 percent tax on marijuana.
“The existing black market for cannabis may prove a formidable competitor to legal markets if new taxes lead to higher prices than available from illicit sources,” the report says.
Recreational...
Read the full article @ The Cannabist