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The Only Advantage to Legal Recreational Marijuana in California is that It is Legal

It may feel good to know that you will not face arrest or receive a citation for having legal recreational marijuana anymore in California starting next year, as long as you are following the states rules about how much you can carry. Beyond that though, it is getting difficult to find the major advantages to legalization. A recent report came out that suggests the taxes to purchase legal recreational marijuana in California may be as high as 45{f1d755e3d686d84b3fba3fb9da3bc25d6eb08724c18385fd50146d58c836a6dd}. Relative to the illegal marijuana market, will it end up costing more to buy legal marijuana?

The illegal marijuana market in California is huge and it does not look like it is going away. One of the significant hopes of legalization advocates is that the illegal marijuana market will eventually disappear with legalized cannabis. A lot of illegal marijuana farmers are unable to get legal either because of the costs associated with going legal or the process to become legal. So again, as of now, what are the real advantages to legalized recreational marijuana in California?

The tax on legal cannabis in California is expected to skyrocket by the start of the year 2018, a new report suggests.

Starting in January 2018, consumers, growers, sellers and businesses in The Golden State may be permitted to pay as much as 45 percent in local and state taxes at the time recreational marijuana sales kick off.

The state plans to treat the new system similar to liquor sales – by permitting persons aged 21 and up to acquire as much as an ounce of cannabis and legally grow up to six plants at their place of residence.

The tax on legal cannabis in California is expected to skyrocket by the start of the year 2018

In January, cannabis consumers, growers, sellers and businesses in The Golden State may be permitted to pay as much as 45 percent in local and state taxes

In some parts of the state of California, the sales tax could reach a shocking 45 percent

The purpose is to push cannabis from farms to distribution centers to be tested for the retail market.

According to CNN Money, the Fitch Ratings report says ‘consumers will pay a sales tax ranging from 22.25{f1d755e3d686d84b3fba3fb9da3bc25d6eb08724c18385fd50146d58c836a6dd} to 24.25{f1d755e3d686d84b3fba3fb9da3bc25d6eb08724c18385fd50146d58c836a6dd}, which includes the state excise tax of 15{f1d755e3d686d84b3fba3fb9da3bc25d6eb08724c18385fd50146d58c836a6dd}, and additional state and local sales taxes ranging from 7.25{f1d755e3d686d84b3fba3fb9da3bc25d6eb08724c18385fd50146d58c836a6dd} to 9.25{f1d755e3d686d84b3fba3fb9da3bc25d6eb08724c18385fd50146d58c836a6dd}.’

Businesses in the area ‘will pay a tax ranging from 1{f1d755e3d686d84b3fba3fb9da3bc25d6eb08724c18385fd50146d58c836a6dd} to 20{f1d755e3d686d84b3fba3fb9da3bc25d6eb08724c18385fd50146d58c836a6dd} of gross receipts, or $1 to $50 per square foot of marijuana plants.’

The purpose of the new plan is to push cannabis from farms to be distributed and tested for the retail market

Local businesses ‘will pay a tax ranging from 1{f1d755e3d686d84b3fba3fb9da3bc25d6eb08724c18385fd50146d58c836a6dd} to 20{f1d755e3d686d84b3fba3fb9da3bc25d6eb08724c18385fd50146d58c836a6dd} of gross receipts, or $1 to $50 per square foot of marijuana plants’

Some say the sales tax say will likely impede the installment of the state’s legal cannabis market

Cannabis growers can also expect to be ‘taxed $9.25 per ounce for flower, and $2.75 per ounce for leaves.’

In some parts of the state, the sales tax could reach the shocking 45 percent – which officials say will likely impede the installment of its legal cannabis market.

John Kagia, analyst for New Frontier Data within the industry, said in a statement: ‘If taxes increase the price of cannabis beyond a certain point, the legal market becomes less competitive than the illicit market.

‘If taxes increase the price of cannabis beyond a certain point, the legal market becomes less competitive than the illicit market,’ said John Kagia (pictured)

‘Then consumers become less likely to make the transition from the illicit market to the legal market,’ Kagia added, according to the report.

The state will also issue temporary licenses at the start of the new year as part of the revised method which will govern the retail regulation of the drug.

If businesses fail to obtain a license by the start of each period, governments will not collect their portion of the revenue.

However, under the state’s multi-billion dollar industry, it’s difficult to determine what the outcome may be.

‘California’s black markets for cannabis were well established long before its voters legalized cannabis in November 2016 and are expected to dominate post-legalization production,’ the Fitch report said.

Cannabis growers can expect to be ‘taxed $9.25 per ounce for flower, and $2.75 per ounce for leaves’

 

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