US: "California’s cannabis market heads into a difficult 2022"

With cannabis taxes poised to rise on Jan. 1 and a legitimate business landscape plagued by a thriving black market, California’s cannabis industry faces uncertainty.

Years ago, California voters approved the use of medical and recreational cannabis with the expectation that legalization would lead to an elimination of a back market and the state would enjoy a dramatic revenue surge.

The Jan. 1 cannabis tax increase — like others before it — stems from a state law requiring the California Department of Tax and Fee Administration to recalculate the cultivation tax rates once a year because of inflation.

In 2016, when cannabis was approved for recreational use in California, the tax was set to 15% on retail sales and a $9.25 per ounce of flower for cultivators.  In addition, the state also has a 7.25% state sales tax apart from the 15% on retail sales.

For cultivators, the levy on marijuana flower per dry-weight ounce will increase from $9.65 to $10.08, cannabis leaves will increase from $2.87 to $3, and fresh marijuana plant material will increase from $1.35 to $1.41.

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