Everyone was really excited about recreational marijuana sales in California at the beginning of the year, both consumers and entrepreneurs. However, California marijuana enthusiasts are still buying illegal marijuana though they may not know it. The legal California cannabis infrastructure is being broken apart by illegal pot stores and delivery services that consumers may not even know are illegal.
California marijuana dispensaries and stores have to pay a lot in taxes and count on business being so robust that they can overcome the large costs of doing business. They are frustrated to say the least that their legitimate business are still being eaten alive by the black market.
Some owners of licensed dispensaries are exasperated. Those who aren’t losing money so far in 2018 say they’re just squeaking by, as new underground shops and illicit delivery services steal their customers with cut-rate prices made possible by the fact that they’re not paying taxes.
Why Am I Paying Taxes, Again?
Those taxes are no joke—they include a nearly 10 percent county sales tax, a 15 percent cut for the state of California and a 10 percent cut on receipts that go to City Hall.
Jared Kiloh, owner of the Higher Path dispensary in Sherman Oaks, said he had to sit on his hands in January, when he was awaiting a license from the city. Meanwhile, multiple illegal shops opened in the surrounding neighborhood and dozens of new delivery services set up shop.
“It’s gotten worse,” says Kiloh. “Come January an uneducated part of the market said, ‘I can buy weed anywhere now.’ Guess what they are doing? They are going anywhere. They’ve come out in droves to the illegal shops.”
There needs to be more enforcement of marijuana laws in order for the legal marijuana industry to stay alive in California. What is California going to do to get rid of the illegal cannabis businesses that are right under their noses?