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California Tax Increase Only Helps the Illicit Market

aridbud

automeister
ICMag Donor
Veteran
Yep, raise the taxes, grows underground flourish!! Supply and demand (for moderately priced herb)
 

AgentPothead

Just this guy, ya know?
Lemme find an appropriate sized duh.
duh.png


And I don't know how it is in Cali, but the Mass dispensary weed where I'm at is not only more expensive than the grey market stuff, it's just not as good.
Holy crap they really pushed people into the grey market.
California also should be wary of losing even more revenue, although the tax hike is designed to do the opposite. Last year, the state took in less than a third of the revenue it projected from regulated cannabis. The more people who move away from the regulated market into the illicit market, the less the state will earn.

Man it sounds like the problem is in the pricing model. If they had it so after taxes it was around the same as a grey market ounce, people would be falling over themselves to get it legally. They started the before taxes price around the grey market price and it just got stupid expensive. If 2 people offer nearly the same product for a huge difference in price, most people will go for the cheaper alternative, that's just simple economics.
 

flylowgethigh

Non-growing Lurker
ICMag Donor
Not only the taxes but cali is going bonkers with the regulations. My farmer buddy is complaining about the handicap parking places he has to have. I ask, on gravel? Nope, paved. He is talking about quitting. I hope not.

I have a hunch the delivery guys in socal are bootleg as hell.

just wait until the feds want their cut.
 

EsterEssence

Well-known member
Veteran
Prop 64 also allows cities opt out of having a dispensary, and a lot of them have. So are people going to drive for a couple hours and pay a bunch of taxes when you could get some delivered or go to your local “friend” and buy some stash cheaper. Makes no sense to me...
 

Tudo

Troublemaker
Moderator
ICMag Donor
Veteran
It's all about the money. The days of people taking big risks for the love of herb have been over for awhile. There's still a few real people in the business but by and large from my perspective is the business is all about the business nowadays.
 

Three Berries

Active member
Illinois has done the same thing. 40% at the state level, 15% at the county and then when the towns put on their tax it's cheaper on the street.
 

Three Berries

Active member
Illegal sellers of cannabis skirt paying those taxes and are able to offer products at a lower cost, which entices consumers to purchase their product instead of legal sellers.

KPIX News reports the tax itself was approved by voters in 2018 and imposed a 1%-5% tax on gross receipts from cannabis sales. The new ordinance suspends the business tax through December 31, 2022.
 

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