From January, marijuana will be available in California pharmacies. But legalization is not cheap for the consumer: heavy taxes are waiting. The industry warns against incentives for the black market.
In a referendum, the Californians voted in the past year for legalization. And the state keeps the bags open.
The approval of the intoxicant for private consumption goes hand in hand with a series of taxes and duties. Whilst legal marijuana, legalized for about two decades, will not be subject to a separate state tax and the local levy will be limited, this will be different for grasses for private consumption in the future. The expected tax revenues can ultimately exceed the one billion dollar mark.
The state of California charges 15 percent on the sale of marijuana and all other cannabis plant products. In addition, cities and municipalities may charge additional fees for sale or cultivation. Nationwide, this is likely to create a confusing mosaic of different rates of donation, varying from city to city, district to district. So many cultivation may not be worthwhile.
How the high taxes and fees will entice the owners of illegal hemp plantations in the regulated business, remains for many a mystery. The levies could pile up in some communities to 45 percent, said these days the financial analyst Fitch Ratings. A report warned in conclusion: "The existing black market for cannabis could prove to be a significant competitor to the legal market if new taxes lead to higher prices than those from illicit sources."
