California Cannabis Tax – Cultivation 

If you are a cannabis patient or consumer, you have most likely asked or shouted “Why are cannabis taxes so high?” Into the ethers.

Cannabis consumers and patients set out with the best intentions to do their part and participate in legalized cannabis. It is the best public safety effort to purchase tested products at licensed retail.

That access and affordability are just not there due to high taxes at multiple points in the supply chain at state and local levels. Taxes stacked on taxes, taxes taxing taxes, taxes compound directly burden operators, patients, and consumers.

As a cannabis operator, you probably shouted “How do we fix this?” coupled with choice expletives.

Let’s begin at the plant’s beginnings. There is a cultivation tax in California cannabis regulations. No other agricultural plant is taxed at cultivation. Actually, most farmers of other agriculture actually receive subsidiaries for their farms.

Cannabis cultivation has just increased by 5% on January 1, 2022 building on an erroneous tax. The tax is a flat rate that does not adjust for sales price. Many cultivators are letting their crops die to cut the risk of losing money due to high taxes.

Cannabis operations have the smallest margins, or no margins at all, and looking to find a way to survive. Jobs are lost, and the remaining workforce feels that extra workload.

These high state taxes along with local taxes add up to between 30-50%, taxes that ultimately, do not return back into the cannabis industry or to the communities affected by the War on Drugs. 

Taxes absolutely run consumers and patients back to the illicit market with the risk of contaminated products for less than half the price. High taxes are creating a public safety issue.

We have advocated for cannabis prohibition for decades, we are now in an infantile legal market, and need to keep advocating for fair regulations that will produce a fair market for operators, consumers, and patients.

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