As California rolls out new tax cuts for legal cannabis growers to provide those who work in the industry relief, many claim the black market continues to make it difficult to survive in the business. When California voters approved Prop 46 legalizing adult-use cannabis, it came with a lot of promises. Unfortunately, some of those promises have brought the industry to near collapse.
Those in the cannabis business have been pleading for tax reform to keep from going broke, but now that it has finally arrived, it's hard to find anybody who's satisfied with it.
"It is my goal to look at tax policy to stabilize the market. At the same time, it's also my goal to get these municipalities to wake up to the opportunities to get rid of the illegal market," Governor Gavin Newsom explained when he announced reform plans at the beginning of the year. It was a welcome relief to those in the cannabis industry. But on Thursday, he signed a reform bill that probably didn't get the response he was hoping for.
"The people who are playing by the rules, honestly, are getting messed up," said Reese Benton, owner of Posh Green Cannabis Boutique. She opened her dispensary in San Francisco's Bayview District in 2017. She says she's regretted the decision to operate legally ever since. Benton is supposed to pay an excise tax of 15 percent, but an invoice from her distributor shows she paid $600 on $2,300 worth of product. That's 26 percent.
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