Cannabis has been the city of Sacramento’s new-found pot of gold. With the most permissive regulatory environment in the region for cultivating, distributing, and selling cannabis, the existing 4% tax on the industry now dwarfs all revenue from all parking lots city-wide. Cannabis businesses are expected to generate about $550 million in revenue this fiscal year — more than $1,000 worth of pot activity for every man, woman, and child who lives in the city. The industry’s estimated work force of 10,000, meanwhile, now rivals that of local employees of the federal government.
But now Sacramento finds itself in a cannabis quandary. Tax revenues peaked two years ago and are on a slight decline. A local industry showing signs of instability wants tax relief. A city staff staring at a structural budget deficit says no, as do youth organizations that are slated to receive 40% of the tax money. A divided city council is calling for a task force.
“We’re not on the same page,” Councilman Rick Jennings said at a recent committee meeting on the topic. “We need to come together and figure out what is really going on in the industry.”
Economists from the noted RAND Corporation think tank warned Californians more than a decade ago that if they legalized marijuana, something dramatic would happen: Its price would go way down, “likely by more than 80%.” Meanwhile, “the price the consumers face will depend heavily on taxes, the structure of the regulatory regime, and how taxes and regulations are enforced.”
Read more at: sacbee.com