With the economy showing signs of slowing and government debt rising, more states and cities are looking to marijuana as a way to squeeze money from the public, in the name of taxes, to enrich government coffers.
California’s counties, cities, and towns took in $1.86 billion in grass taxes in 2018 and about the same amount during the first nine months of 2019.
Port Hueneme, CA, collected $1.8 million in marijuana duties in 2018 and used the money to add to its pension fund and hire more police officers.
PUBLISHER’S NOTE: As a result of the very high taxes on marijuana imposed by politicians, pot revenues have proven to be unreliable. In the first six months of 2018, California’s marijuana taxes fell 54 percent below projections.
If a state or city places too high a tax on weed, tokers will resort to the black market, a sector that still does about $40 billion worth of business each year, according to Moody’s Analytics.
A case in point: in California, marijuana flowers cost 77 percent more to buy legally than illegally, according to BDS Analytics.
A pot-laced chocolate bar in Illinois’s capital of Springfield that might retail for $25 will cost $33.19 when each layer of government adds its due.
TREND FORECAST: State and local governments will join the pot tax parade with high hopes but will be disappointed in their results. The black market, already well established, will continue to compete with legal outlets.
