The legal cannabis market in Los Angeles is hitting a breaking point. At least two-thirds of LA weed businesses have failed to pay their local taxes, and the city is currently out hundreds of millions of dollars in lost revenue.
The dire financial status of the city's cannabis stores — with more than 500 out of LA's 738 pot companies owing outstanding taxes — has forced the city to take the extreme step of proposing an amnesty program to bail out the industry, according to a city letter obtained by SFGATE.
The LA Office of Finance is recommending that the city waive all tax penalties for cannabis companies in exchange for the businesses repaying their tax debts under payment plans, according to an Oct. 2 letter signed by Diana Mangioglu, the city's treasurer, and sent to the LA City Council. Mangioglu said the program was necessary because of the "extremely challenging" business environment.
"Due to widespread non-compliance with tax and permit regulations feeding a thriving black market, combined with a tax burden which vastly exceeds the rates paid by other industries, legally permitted cannabis businesses face a daunting task," Magioglu wrote in the letter.
Read more at SF Gate