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Invisibleopenmind
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Registered: 08/03/07
Posts: 12,394
California marijuana taxes will increase New Year’s Day
    #26401870 - 12/26/19 06:42 PM (1 year, 2 months ago)

https://mjbizdaily.com/california-marijuana-taxes-will-increase-new-years-day/

After having avoided an increase in state taxes on legal marijuana, California officials changed course Thursday and announced MJ excise and cultivation taxes will go up effective Jan. 1.

High state and local tax rates have been an industry problem that have made legal businesses less competitive with the illicit market: Unlicensed retailers can lure customers with lower prices, since rogue shops don’t pay any taxes.

In announcing the move, the California Department of Tax and Fee Administration (CDTFA) – which must recalculate the wholesale cannabis markup rate every six months – revealed that the markup rate for the marijuana excise tax will increase from 60% to 80% on New Year’s Day.

The markup rate is used to provide the basis for California’s 15% excise tax.

The increase will also raise the state cultivation tax to adjust for inflation, raising those taxes as well:
$9.65 from $9.25 for an ounce of flower, or an increase of 4.3%.
$2.87 from $2.75 for an ounce of leaves, or an increase of 4.3%.
$1.35 from $1.29 for an ounce of fresh marijuana plant material, or an increase of 4.6%.
The CDTFA’s markup rate is based on the wholesale average market price of cannabis, and the agency had previously declined to increase the state marijuana tax rate.

The agency statement said the markup rate change was based on “an analysis of statewide market data,” and a CDTFA spokesman wrote in an email to Marijuana Business Daily that the tax adjustments are a result of existing state law.

“When implementing (Proposition 64), the Legislature moved the incidence of the tax from the retailer to the distributor, requiring CDTFA to determine the average markup rate every six months,” CDTFA spokesman Casey Wells wrote.

“The purpose of the markup is to have the actual tax match the 15% gross receipts rate approved by voters. After analyzing thousands of transactions in the state’s Track and Trace system, CDTFA analysts have determined that the required markup rate for the period beginning January 1, 2020, is 80%.”

When asked if the excise markup rate will change again in another six months, Wells said that will depend on wholesale market data. But the cultivation tax, since it’s based on inflation, would only be adjusted once a year, he said.

To date, legislative efforts to lower state taxes have fallen short, meaning the legal supply chain has continued to struggle to attract customers.

Nicole Elliott, senior advisor on cannabis in Gov. Gavin Newsom’s Office of Business and Economic Development, emphasized that the tax hike “is not a discretionary action” by CDTFA, but rather a natural outcome of laws established in 2017 by the legislature.

“We support policies that lead to less cash flow issues for small businesses, establish more parity across the industry, simplify compliance for everyone involved and support a healthy legal market,” Elliott wrote in an email to MJBizDaily.

“We remain committed to working with stakeholders and the Legislature to further develop a framework that realizes all these things.”

Industry insiders, however, immediately criticized the move, as did Oakland Democrat Rob Bonta, a state assembly member who has twice tried – but failed – to lower MJ taxes through the legislature.

In an emailed statement, Bonta called the tax hike “deeply concerning.”

“This short-sighted move ignores the realities that licensed businesses are at the breaking point, with many struggling to survive,” Bonta wrote, and reiterated his support for at least temporarily lowering state cannabis taxes.

The California Cannabis Industry Association (CCIA) said the increase left its members “stunned and outraged.”

“As California’s regulated market spirals towards collapse from taxes on cannabis consumers … we believe that the CDTFA’s decision to increase tax burdens on compliant cannabis operators is counter to developing a safe industry,” according to the association’s statement.

“Widening the price disparity gap between illicit and regulated products will further drive consumers to the illicit market at a time when illicit products are demonstrably putting people’s lives at risk.”

Other industry insiders agreed.

“At the very least, this is tone deaf, given what the legal industry is going through right now and the lack of control of the illicit market,” said Adam Spiker, the executive director of the Southern California Coalition, a Los Angeles-based cannabis trade group.

A report on cannabis taxes, expected in December from the Legislative Analyst’s Office (LAO), has been highly anticipated by industry insiders who hope it will give them political ammunition to support lowering statewide marijuana tax rates.

Bonta cited that upcoming report in his emailed statement, and said the state would be “wise to consider the findings (of the LAO)… before unilaterally moving to create an even heavier tax burden” for the legal cannabis trade.

https://mjbizdaily.com/california-marijuana-taxes-will-increase-new-years-day/







:facepalm:

.


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OfflineJohnRainy
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Registered: 07/09/19
Posts: 1,244
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Re: California marijuana taxes will increase New Year’s Day [Re: openmind]
    #26402236 - 12/27/19 12:09 AM (1 year, 2 months ago)

They were going to increase it by 60% but now it's 80%.

Hell with it.  Should be a cottage industry anyways.  If people growing in their closets is working so well, I say it's a good thing.  Tricky legally though because it's unregulated and untaxed, and that's a real thing.

But can you argue with the results?  The illicit marijuana industry has been satisfying demand with few serious complaints for quite a long time.  And the nature of it has given franchise to anybody who has a closet. 

This has helped handicap people, unemployable people, students, and all those dispossessed classes have a way to get some means of production.  And also enables criminal gangs.  I like the first part and would like to see a solution that preserves it and eliminates the second.


I don't know what legalization is going to lead to.  Here in Canada the legal market is having a terrible time competing with the cottage industry one.  Expected earnings have been slashed.  I read that Quebec may lower the price to $5 a gram retail in an effort to kill the black market.


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Offlineprettyhatemachine
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Registered: 06/24/19
Posts: 71
Last seen: 12 days, 17 hours
Re: California marijuana taxes will increase New Year’s Day [Re: JohnRainy]
    #26402413 - 12/27/19 04:33 AM (1 year, 2 months ago)

Is the Canadian cannabis industry government run?


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InvisibleAmanita86
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Registered: 09/26/12
Posts: 74,527
Loc: hades
Re: California marijuana taxes will increase New Year’s Day [Re: JohnRainy]
    #26402437 - 12/27/19 05:08 AM (1 year, 2 months ago)

Oh hey more taxes, imagine that.  Simply amazing how that works.


--------------------
:mushroom2:Orange clock, pencil:bouncysmoke:
"They threw me off the hay truck about noon...":fishing:
:mushroom2:*Mark 15:34:levitate::mushroom2::blueninja:
Gam zeh ya’avor...:sunny:


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InvisibleTulipslave
Homo sapiens sapiens, lol

Registered: 07/25/17
Posts: 6,751
Re: California marijuana taxes will increase New Year’s Day [Re: openmind]
    #26402657 - 12/27/19 10:20 AM (1 year, 2 months ago)

Quote:

openmind said:
https://mjbizdaily.com/california-marijuana-taxes-will-increase-new-years-day/

After having avoided an increase in state taxes on legal marijuana, California officials changed course Thursday and announced MJ excise and cultivation taxes will go up effective Jan. 1.

High state and local tax rates have been an industry problem that have made legal businesses less competitive with the illicit market: Unlicensed retailers can lure customers with lower prices, since rogue shops don’t pay any taxes.

In announcing the move, the California Department of Tax and Fee Administration (CDTFA) – which must recalculate the wholesale cannabis markup rate every six months – revealed that the markup rate for the marijuana excise tax will increase from 60% to 80% on New Year’s Day.

The markup rate is used to provide the basis for California’s 15% excise tax.

The increase will also raise the state cultivation tax to adjust for inflation, raising those taxes as well:
$9.65 from $9.25 for an ounce of flower, or an increase of 4.3%.
$2.87 from $2.75 for an ounce of leaves, or an increase of 4.3%.
$1.35 from $1.29 for an ounce of fresh marijuana plant material, or an increase of 4.6%.
The CDTFA’s markup rate is based on the wholesale average market price of cannabis, and the agency had previously declined to increase the state marijuana tax rate.

The agency statement said the markup rate change was based on “an analysis of statewide market data,” and a CDTFA spokesman wrote in an email to Marijuana Business Daily that the tax adjustments are a result of existing state law.

“When implementing (Proposition 64), the Legislature moved the incidence of the tax from the retailer to the distributor, requiring CDTFA to determine the average markup rate every six months,” CDTFA spokesman Casey Wells wrote.

“The purpose of the markup is to have the actual tax match the 15% gross receipts rate approved by voters. After analyzing thousands of transactions in the state’s Track and Trace system, CDTFA analysts have determined that the required markup rate for the period beginning January 1, 2020, is 80%.”

When asked if the excise markup rate will change again in another six months, Wells said that will depend on wholesale market data. But the cultivation tax, since it’s based on inflation, would only be adjusted once a year, he said.

To date, legislative efforts to lower state taxes have fallen short, meaning the legal supply chain has continued to struggle to attract customers.

Nicole Elliott, senior advisor on cannabis in Gov. Gavin Newsom’s Office of Business and Economic Development, emphasized that the tax hike “is not a discretionary action” by CDTFA, but rather a natural outcome of laws established in 2017 by the legislature.

“We support policies that lead to less cash flow issues for small businesses, establish more parity across the industry, simplify compliance for everyone involved and support a healthy legal market,” Elliott wrote in an email to MJBizDaily.

“We remain committed to working with stakeholders and the Legislature to further develop a framework that realizes all these things.”

Industry insiders, however, immediately criticized the move, as did Oakland Democrat Rob Bonta, a state assembly member who has twice tried – but failed – to lower MJ taxes through the legislature.

In an emailed statement, Bonta called the tax hike “deeply concerning.”

“This short-sighted move ignores the realities that licensed businesses are at the breaking point, with many struggling to survive,” Bonta wrote, and reiterated his support for at least temporarily lowering state cannabis taxes.

The California Cannabis Industry Association (CCIA) said the increase left its members “stunned and outraged.”

“As California’s regulated market spirals towards collapse from taxes on cannabis consumers … we believe that the CDTFA’s decision to increase tax burdens on compliant cannabis operators is counter to developing a safe industry,” according to the association’s statement.

“Widening the price disparity gap between illicit and regulated products will further drive consumers to the illicit market at a time when illicit products are demonstrably putting people’s lives at risk.”

Other industry insiders agreed.

“At the very least, this is tone deaf, given what the legal industry is going through right now and the lack of control of the illicit market,” said Adam Spiker, the executive director of the Southern California Coalition, a Los Angeles-based cannabis trade group.

A report on cannabis taxes, expected in December from the Legislative Analyst’s Office (LAO), has been highly anticipated by industry insiders who hope it will give them political ammunition to support lowering statewide marijuana tax rates.

Bonta cited that upcoming report in his emailed statement, and said the state would be “wise to consider the findings (of the LAO)… before unilaterally moving to create an even heavier tax burden” for the legal cannabis trade.

https://mjbizdaily.com/california-marijuana-taxes-will-increase-new-years-day/







:facepalm:

.





That's insane.  Most non-backed small farmers in SoHum are already struggling if not on the brink of failure and losing everything they have (including their homes and properties.)  I know lots of these people as I'm a contractor who works all over the south county.  Our crew used to have a two year waiting list, and now we sometimes struggle through months because almost EVERYONE is totally tied up with all the fees and taxes.

This will literally destroy what was already barely hanging on.


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OfflineJohnRainy
Stranger

Registered: 07/09/19
Posts: 1,244
Last seen: 1 year, 1 month
Re: California marijuana taxes will increase New Year’s Day [Re: prettyhatemachine]
    #26402941 - 12/27/19 01:54 PM (1 year, 2 months ago)

Quote:

prettyhatemachine said:
Is the Canadian cannabis industry government run?




No.


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InvisibleAmanita86
OTD C.O.
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Registered: 09/26/12
Posts: 74,527
Loc: hades
Re: California marijuana taxes will increase New Year’s Day [Re: Tulipslave] * 1
    #26403049 - 12/27/19 03:32 PM (1 year, 2 months ago)

Back to black market..


--------------------
:mushroom2:Orange clock, pencil:bouncysmoke:
"They threw me off the hay truck about noon...":fishing:
:mushroom2:*Mark 15:34:levitate::mushroom2::blueninja:
Gam zeh ya’avor...:sunny:


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InvisibleTulipslave
Homo sapiens sapiens, lol

Registered: 07/25/17
Posts: 6,751
Re: California marijuana taxes will increase New Year’s Day [Re: Amanita86]
    #26403219 - 12/27/19 06:25 PM (1 year, 2 months ago)

Quote:

Amanita86 said:
Back to black market..





unregulated market wholesale prices supposedly went up this year.  don't know exact prices, but people are talking $200-300 more per pound than the last few years.  one of my friends sold most of his pounds last year for $500 per, and that was considered average to good.



the last year i grew we were still fetching $1100/pound.  to me, that was no longer worth it (granted i put 500+ hours per summer into ~50 plants, not including working up the raised beds in the spring or harvest and post-harvest in the fall.  i was coming in at about $20 hour and killing myself.  if i had trimmed my own, the wage would've been better, but i was a horribly slow trimmer.


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OfflineJohnRainy
Stranger

Registered: 07/09/19
Posts: 1,244
Last seen: 1 year, 1 month
Re: California marijuana taxes will increase New Year’s Day [Re: Tulipslave]
    #26403253 - 12/27/19 06:50 PM (1 year, 2 months ago)

$500 a pound?  What kind of quality is that?  That's barely over $1/gram

Geez that is cheap.

Well, at least there will be a lot more people smoking grass now.  Awash in a flood of cheaper and cheaper pot.


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InvisibleTulipslave
Homo sapiens sapiens, lol

Registered: 07/25/17
Posts: 6,751
Re: California marijuana taxes will increase New Year’s Day [Re: JohnRainy]
    #26403445 - 12/27/19 08:30 PM (1 year, 2 months ago)

Quote:

JohnRainy said:
$500 a pound?  What kind of quality is that?  That's barely over $1/gram

Geez that is cheap.

Well, at least there will be a lot more people smoking grass now.  Awash in a flood of cheaper and cheaper pot.





not like indoor or dep, but still damn good and crystally, all organic outdoor.


you guys must not understand how many millions of pounds used to come out of southern humboldt alone before legalization ran a huge chunk of people out of business.  and that is wholesale price.  people who have solid/old connections are still fetching somewhat decent prices.

even dep prices dropped considerably, from what i've heard.  last year dep wholesale was $800-1200 depending on when in the season it sold.


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Offlinesk8fast
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Registered: 08/02/10
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Re: California marijuana taxes will increase New Year’s Day [Re: JohnRainy]
    #26406017 - 12/29/19 11:53 AM (1 year, 2 months ago)

Quote:

JohnRainy said:
$500 a pound?  What kind of quality is that?  That's barely over $1/gram

Geez that is cheap.

Well, at least there will be a lot more people smoking grass now.  Awash in a flood of cheaper and cheaper pot.



I was thinking the same thing $9.65 for an oz is crazy cheap I wouldnt care even if the tax was 90% at those prices it's as cheap as alcohol. I pay 150 an oz now


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InvisibleTulipslave
Homo sapiens sapiens, lol

Registered: 07/25/17
Posts: 6,751
Re: California marijuana taxes will increase New Year’s Day [Re: sk8fast]
    #26406065 - 12/29/19 12:17 PM (1 year, 2 months ago)

Quote:

sk8fast said:
Quote:

JohnRainy said:
$500 a pound?  What kind of quality is that?  That's barely over $1/gram

Geez that is cheap.

Well, at least there will be a lot more people smoking grass now.  Awash in a flood of cheaper and cheaper pot.



I was thinking the same thing $9.65 for an oz is crazy cheap I wouldnt care even if the tax was 90% at those prices it's as cheap as alcohol. I pay 150 an oz now





it's not $9.65/oz.  and this is unregulated (black market) wholesale, not going to a dispensary.


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Offlineprettyhatemachine
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Registered: 06/24/19
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Re: California marijuana taxes will increase New Year’s Day [Re: Tulipslave]
    #26406615 - 12/29/19 06:22 PM (1 year, 2 months ago)

It’s for the greater good, roads and bridges and shit :lol:


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OfflineCrispy224
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Re: California marijuana taxes will increase New Year’s Day [Re: prettyhatemachine]
    #26406642 - 12/29/19 06:56 PM (1 year, 2 months ago)

It would be interesting knowing the cannabis taxes compared to alcohol. I would imagine alcohol causes much more health problems to uninsured individuals.


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Matsesherbs.com is a SCAM site. Do not send them any money!!!!


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InvisibleTulipslave
Homo sapiens sapiens, lol

Registered: 07/25/17
Posts: 6,751
Re: California marijuana taxes will increase New Year’s Day [Re: prettyhatemachine]
    #26407411 - 12/30/19 10:07 AM (1 year, 2 months ago)

Quote:

prettyhatemachine said:
It’s for the greater good, roads and bridges and shit :lol:






They passed a road tax a year or two ago in Humboldt.  It was passed specifically for the purpose of fixing all the insanely damaged roads we have (seriously, you guys have no idea).  Somehow, the board of supervisors re-purposed that money and almost no roads have been fixed aside from the emergency funded jobs of late.

Then they passed a Measure (tax) to fund the VFD's and other local/volunteer emergency organizations (Tech Rescue, also a volunteer group, included.)  They handed out ONE round of funding then put the rest of the money elsewhere.


So, no, none of that tax money is going to anything productive, and lots of it ends up in Rex Bohn's or his friends'/cronies' hands.  Humboldt County is more corrupt than NYC.


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OfflineSFS96S
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Re: California marijuana taxes will increase New Year’s Day [Re: Tulipslave] * 2
    #26407469 - 12/30/19 10:48 AM (1 year, 2 months ago)

Fuck taxes and fuck the government. Weed needs to be freed not regulated. I’ll never pay taxes for weed...


--------------------
How I make and preserve tea


Consuming consumes a man That was never a purpose of life To only crave for material joys Is believing the lie - Mellow Mood


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InvisibleAmanita86
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Registered: 09/26/12
Posts: 74,527
Loc: hades
Re: California marijuana taxes will increase New Year’s Day [Re: SFS96] * 1
    #26407473 - 12/30/19 10:50 AM (1 year, 2 months ago)

Taxes, aka cartel extortion..


--------------------
:mushroom2:Orange clock, pencil:bouncysmoke:
"They threw me off the hay truck about noon...":fishing:
:mushroom2:*Mark 15:34:levitate::mushroom2::blueninja:
Gam zeh ya’avor...:sunny:


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InvisibleTulipslave
Homo sapiens sapiens, lol

Registered: 07/25/17
Posts: 6,751
Re: California marijuana taxes will increase New Year’s Day [Re: SFS96]
    #26407483 - 12/30/19 11:02 AM (1 year, 2 months ago)

Quote:

SFS96 said:
Fuck taxes and fuck the government. Weed needs to be freed not regulated. I’ll never pay taxes for weed...





:highfive:


that's why i work trade doing my buddy's firewood for a half or whole pound of smoke every year.  Currently he has 3-4 years of firewood from what we did last year, and i have (erm, had) a 1.5 year supply of buds.  :grin::bigweed::joint:


Edited by Tulipslave (12/30/19 11:02 AM)


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OfflineSFS96S
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Re: California marijuana taxes will increase New Year’s Day [Re: Tulipslave] * 1
    #26407506 - 12/30/19 11:24 AM (1 year, 2 months ago)

Not a bad trade:rockon: I plan to keep my people supplied with tax free weed, my friends used to go to Colorado every couple of months until I started to get them bud that’s just as good and cheep without getting fucked by taxes.


--------------------
How I make and preserve tea


Consuming consumes a man That was never a purpose of life To only crave for material joys Is believing the lie - Mellow Mood


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Offlineviraldrome
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Re: California marijuana taxes will increase New Year’s Day [Re: JohnRainy]
    #26407554 - 12/30/19 12:06 PM (1 year, 2 months ago)

Quote:

JohnRainy said:

This has helped handicap people, unemployable people, students, and all those dispossessed classes have a way to get some means of production.  And also enables criminal gangs.  I like the first part and would like to see a solution that preserves it and eliminates the second.


I don't know what legalization is going to lead to.  Here in Canada the legal market is having a terrible time competing with the cottage industry one.  Expected earnings have been slashed.  I read that Quebec may lower the price to $5 a gram retail in an effort to kill the black market.




They can charge a dollar a gram I won't smoke legal Canadian weed. I'm poor but my building prohibits growing. I smoke 100 percent illegal weed though. 

The thing that suffers worst under a high tax regime is quality, the people pulling early because a 10 week sativa is going to be too expensive. High taxes ruin what makes weed great. No one seems to care about craft buds they just want cheap.


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