Terrible news for those of you who enjoy relatively affordable weed and a competitive and regulated cannabis market in California. On Thursday the California Department of Tax and Fee Administration announced they’ll be hiking up excise and cultivation tax fees on January 1, 2020. And right after we wrote our “silver lining” post, too. Thanks, CDTFA!
CDTFA, who apparently skipped school on “how to read a room” day, choosing to raise excise taxes from an already painful 60% to an outright Draconian 80% will simultaneously put an unbearable squeeze on licensed operators across the Golden State and drive consumers away from those same licensed operators and into the waiting clutches of unlicensed operators due to sticker shock.
Our colleagues at the California Cannabis Industry Association, in a remarkable and arguably unwarranted display of restraint, urged the CDTFA via press release to reconsider this planned increase while also not using the phrases “brigands” or “highway robbery” or even any cuss words once. Choosing to take the high road, possibly while jamming out to Bob Seeger’s “Feel Like A Number,” CCIA instead sent CDTFA the clearest of messages:
As California’s regulated market spirals towards collapse from taxes on cannabis consumers, local bans, onerous regulations, slow growth, and a thriving illicit market, we believe that the CDTFA’s decision to increase tax burdens on compliant cannabis operators is counter to developing a safe industry. 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.
MMLG’s own internal team unburdened by such restraint, expressed terser, more focused statements on hearing of the news. “This is adding insult to injury,” our director of licensing explained. Meanwhile, our typically verbose and jocular Dr. Juli Crockett, after recovering from a stroke of rage-induced apoplexy, simply responded via text message with the cat meme. You know the one.
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Smash that like button, CDTFA! And while you’re at it, read the comments from industry colleagues, entrepreneurs and business owners, maybe y’all will learn something.
Meanwhile, MJBiz Daily broke down the costs being passed down to you, the cannabis-loving consumer.
- $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%.
Cool. Happy Friday, guys!