Be it the recreational marijuana or the marijuana medicine, taxes are likely to rise for both the categories. The tax is mounting and the prices and black market with it as well. High taxes on the legal marijuana in California can turn many consumers away from the marijuana shops in no time. And, this probably would give new heights to the black market success rate.
The Estimates of the Credit Rating Agency
The agency estimated state and local taxes on cannabis. As the uses of medical marijuana have also increased with time, the same has led to the increase in the taxes as well as the black market. Talking about the existing black market of cannabis, it may become an alarming competitor to legal markets, if new taxes and prices are anyway higher.
How about the Recreational Marijuana Taxes?
This market of marijuana will be taxed on both the levels; the state and the local level as well. And, this will eventually boost the high rates. California will impose a 15% of excise tax. Even the business tax will be anywhere between 1 to 20%. So, the prices are likely to rise beside the black market and the taxes.
Will it Drive the Customers to the Black Market?
Of course, the higher price of the legal marijuana is surely going to drive the customers to the black market. The state is believed to be the epicenter of cannabis growing companies. While this state has an increased price, which is leading to the higher rate of people turning to the black market. On the other hand, other states have decreased prices.
The state will decide if it needs to house marijuana businesses and map its own regulations and tax structure or not. The states like Adelanto are simply using the marijuana cultivation to develop the economic development strategy. The state is actually encouraging marijuana growers, which is why the growing of marijuana is leading to the economic development.
The Issue of the California!
One of the major issues of California is that both the state and municipalities have not released their rules and regulations for the same. This has left the business in limbo just a few weeks before the marijuana was actually legalized. Some cities including San Francisco have confessed that they will not have their rules and regulations in place for the commencement of the legalization on January 1st of this year.
So, be it the recreational or the medical marijuana, the prices and the black market will surely go up, if the tax rate is increasing. Will California be stopping the increased taxes or will it just continue with the existing prices? Well, California needs to decide this and control the boosted prices anyway.