Local bans on marijuana businesses in California are helping the illicit market to thrive and are depriving the state and municipalities of tax revenue that could help offset economic losses caused by the coronavirus pandemic, according to a new study.
The report analyzes the financial impact from the 75 percent of cities and counties that have implemented cannabis market bans despite the 2016 statewide vote to legalize the plant for adult use.
“Inconsistencies between different jurisdictions, particularly with tax rates, licensing procedures, and land use regulations” have created a situation in which “the illegal market continues to make up a large majority of the cannabis sales in California,” it concludes.
The analysis shows that while there’s strong demand and potential for revenue, California is far behind other legal states because of the widespread localized prohibitions.
“In benchmarking California’s legal cannabis sales performance against other states that have legalized recreational cannabis sales, the state generally does not fare well,” it says, noting that “California’s per capita taxable cannabis sales of $51.77 in 2019 is less than half the per capita sales in Washington, Oregon, and Colorado.”
Published: August 14, 2020
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