legalization tagged posts

Illegal Market Flourishes AS California Pot Taxes Lag

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A cannabis dispensary sign with a large marijuana leaf on it.

LOS ANGELES (AP) – The Democrat’s proposed spending plan, released Thursday, projects the state will bank $355 million in marijuana excise taxes by the end of June. Deep in Gov. Gavin Newsom’s new budget is a figure that says a lot about California’s shaky legal marijuana market: The state is expecting a lot less cash from cannabis taxes. That’s roughly half of what was once expected after broad legal sales kicked off last year.
Most consumers are continuing to purchase pot in the illegal marketplace, where they avoid taxes that can near 50 percent in some communities.
Tax collections are expected to gradually increase over time, but predicting what that amount will be remains something of a guess.
Industry experts say the diminished tax income reflects a somber reality.
Tax collections for “a newly created market are subject to significant uncertainty,” the budget said. Josh Drayton of the California Cannabis Industry Association credited Newsom with taking “a realistic look at the challenges” after a bumpy first year of broad legal sales.
Newsom also recommended a sharp increase in spending for regulatory programs, although it’s an open question whether it will be enough to help steady the state pot economy.

PORTLAND, OR - FEBRUARY 27, 2016: Marijuana Paradise a pot dispensary in Portland Oregon part of a string of retail drug stores that have popped up when Oregon passed a law to legalize marijuana.

Initially “the state was too optimistic about how the implementation of legalization was going to work. This governor has paid attention to that,” Drayton said. The budget recommends just over $200 million for marijuana-related activities in the fiscal year that starts July 1, which would be over a 50 percent boost from the current year. That said, Drayton added that legal businesses need a break from hefty tax rates that are driving consumers to the illicit economy. Local governments are free to slap taxes on sales and on growers too, which has created a confusing patchwork of tax rates around the state. Various proposals have been made to cut state pot taxes.
The state’s top marijuana regulator, Lori Ajax, has said the state intends to get more businesses licensed and operating in 2019, while cracking down on rogue operators who continue to proliferate across the state.
By some estimates, up to 80 percent of sales in the state remain under the table, snatching profits from legal storefronts. At year’s end, California’s effort to transform its longstanding illegal and medicinal marijuana markets into a unified, multibillion-dollar industry remained a work in progress. Meanwhile, the courts budget includes nearly $14 million for resentencing of thousands of drug offenders whose offenses are no longer crimes since California legalized recreational pot.

SUN VALLEY, CA - MAY 26, 2016: Numerous edible medical marijuana cookies labeled, packaged and stacked for sale at a medical marijuana dispensary in Sun Valley, CA on May 26, 2016.

The Crow is a contributing writer for

Contributors to this article;

American Press Association

California Cannabis Asscociation


Higher Dispensary Pot Sales Expected On ‘Weed Wednesday”

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Cannabis industry insiders are predicting a sales “high” as pot smokers stock up on supplies before the Thanksgiving holiday. Thursday is supposed to be all about turkey, but Wednesday is apparently all about THC. “We expect this year’s holiday week to be awesome since so many Americans are becoming more open to cannabis consumption across the USA, particularly in California since legalization in January.” “Last year, Eaze saw a 98 percent increase in deliveries on Green Wednesday compared to a typical Wednesday in 2017,” Shriavi told HuffPost. Shiran Shiravi, the director of consumer communications at Eaze, a company that delivers cannabis products in California, expects to handle nearly double the doobie deliveries of a typical Wednesday, based on past results. That spike comes with a risk of shortages in states like Massachusetts, which on Tuesday will become the first state east of the Mississippi where pot is legal, according to the Boston Globe. “Obviously there is an immense demand, and we’ve been preparing for a while to help meet this. Sam Barber of Cultivate, a dispensary in Leicester, told WCVB TV it’s possible that demand will initially outpace the supply. We can’t make any guarantees about how long our supplies will last.

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Jessie Gibson, the co-founder and VP of Marketing for Greenery Map, a cannabis search engine and app, says shortages are a fact of life in his business for the short term. Some industry insiders say shortages and long lines at dispensaries are possible even in states like California where marijuana has been legally available since the first of the year.  “I think that the extent of the shortages will continue, but it will be market specific. Somewhere that is recently legal doesn’t have the same supply as let’s say California, but the demand will be very high. “We are seeing shortages every day these days as the interest continues to grow, and as cannabis sheds its stigma.” Others like Hannah Davis of Mammoth Distribution, which distributes cannabis products all over California, believes retailers are prepared for the lift in sales. “We expect sales to double this week, but we’re seeing our retailers stocking up so, hopefully, it’s not an issue,” she said. “I imagine that we will see these shortages for a number of years while the producers catch up with the ever-growing demand.” “I do expect people to make larger purchases to share with friends.” And The real question is, with a rise in cannabis sales for Thanksgiving, will we see a decrease in leftovers?”

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Contributors to this article:

Mammoth Distribution,

Greenery Map

Boston Globe.