US (CA): Attorney general calls for lowering taxes on cannabis to combat illicit market

California’s attorney general says the cost of doing business in the state’s legal cannabis marketplace is too steep, pointing to high taxes and compliance hurdles that can create incentives for entrepreneurs to remain in the illicit market.

“The barriers to entry are too high,” state Attorney General Rob Bonta (D) said at an event in Fresno. “The costs to stay in operation are too high. And we should be lowering taxes at least temporarily.” For operators trying to comply with state law, he continued, “We should make the regulatory burden less than what it is while we target the illicit market that is undercutting them.”

Bonta’s comments came as he announced a new program to aid cities and counties in addressing illegal cannabis activity through administrative enforcement and nuisance abatement. For too long, he said, fly-by-night operators in the state have gotten away with it.

“Some folks believe they can avoid the tax burden or regulatory burden and just operate and make a profit without being legal,” Bonta said at the event. “And they’ve been doing it. They haven’t been shut down. They haven’t had an administrative action taken against them. And that’s what is necessary, and that’s why this will be an important tool.”


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