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California Considers Cutting Marijuana Taxes To Draw Legal Customers

SACRAMENTO, Calif. — Less than three months after California launched legal marijuana sales for adults, the state could consider temporarily slashing hefty tax rates that some say are driving buyers into the black market.

Growers and sellers in the nation’s largest legal marketplace have been complaining that taxes that in some cases can near 50 percent are too high. Many consumers, they say, are shopping in the underground market to save a buck.

Finding a sweet spot for marijuana taxation has been an issue in other pot-friendly states.

Washington state, for example, initially imposed separate 25 percent taxes up to three times: when the grower sold it to the processor, when the processor sold it to the retailer and at the point of public sale. In 2015 that was pushed down to a 37 percent tax at the point of retail sale, plus sales tax. In Seattle, that combined rate is about 47 percent for recreational sales.

In Sacramento, Republican Assemblyman Tom Lackey and Democratic Assemblyman Rob Bonta proposed a plan Thursday to dial back the state tax rates to encourage buyers to patronize legal shops.

[Read more at The Denver Post]
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