GRASS NOT SO GREEN
“Between customers, retailers and growers, taxes on cannabis may reach as high as 45 percent in parts of the state, according to a Fitch Ratings report. Those high taxes may keep consumers away from legal marijuana stores once the recreational retail market goes live on January 1,” writes CNN Money columnist Aaron Smith.
Cannabis consumers will pay a sales tax ranging from 22.25 percent to 24.25 percent, made up of a combination of state excise tax plus some additional state and local sales taxes. Local businesses will have to pay a tax ranging from 1 percent to 20 percent of gross receipts — or $1 to $50 per square foot of marijuana plants that they grow.
In addition, farmers will be taxed $9.25 per ounce for flower, and $2.75 per ounce for leaves.
“The Fitch report says this combination of state and local taxes for consumers, retailers and growers could keep portions of California’s cannabis industry off the grid, where it has flourished for some time,” Mr. Smith observes.