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US (CA): California is raising taxes on cannabis again

The California Department of Tax and Fee Administration (CDTFA) announced yesterday that it plans to raise taxes on the legal cannabis industry once again. Increasing cannabis tax rates is considered to be another blow to an industry that is currently facing an economic downturn in a depressed market.

The legal cannabis industry faces stiff competition from a thriving illicit market, due to the non-compliant market’s significantly lower price points. The CDTFA’s latest planned tax increase will further exacerbate price point discrepancies between the compliant and non-compliant markets. Potentially, cannabis consumers may be driven away from the heavily-taxed legal market if the latest tax increases are passed on to consumers rather than absorbed by operators. 

While the CDTFA describes its mission “to make life better for Californians by fairly and efficiently collecting the revenue that supports our essential public services,” it is hampering the legal cannabis industry’s ability to operate cost-effectively. This latest tax increase is prompting some California cannabis executives to believe CDTFA is deliberately trying to crush the livelihood of legal operators.

“It makes you wonder if the state wants the legal cannabis industry to fail,” said one exasperated executive on the condition of anonymity.

Read more at forbes.com

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