California’s first year of recreational legal weed was a major bust
The state nearly taxed and regulated its recreational marijuana industry out of business
By Amy Martyn 12/31/2018 | ConsumerAffairs
Photo (c) Shannon Price – Getty ImagesIn the city of Los Angeles, people no longer need to meet with a drug dealer or a doctor if they want to buy weed. Instead, shoppers can wait in line outside a dispensary, flash their Government-approved ID cards, and then pay a 34.5 percent sales tax for the privilege of using recreational cannabis.
California’s first year of recreational weed legalization has been slow due to high sales taxes and other regulations that put a chokehold on the industry.
Under the new recreational cannabis regulations, all California shoppers are subject to a state excise tax of 15 percent before local city taxes are added on. According to a recent analysis by the Los Angeles Times, sales taxes on recreational pot reached as high as 45 percent in some municipalities.
The first year of Prop 64
When California voters passed Proposition 64 in 2016, the promise of weed that could be easily purchased from a local storefront had industry experts and state officials seeing dollar signs. Despite fierce opposition from law enforcement groups, some state officials optimistically predicted that there would be 6,000 licensed cannabis shops in several years and $1 billion in annual revenue.
As the first year of Proposition 64’s implementation comes to a close, however, the numbers tell a different story. The state Bureau of Cannabis Control has only issued 547 licenses to marijuana retail stores this year, and state tax revenue is expected to generate just $471 million.
Most cities banned weed
The majority of cities in California failed to embrace legal weed. They instead took advantage of a provision in Proposition 64 that gave municipalities authority to regulate weed sales.
Numerous beach cities, including Santa Monica, Redondo Beach, Manhattan Beach, and Hermosa Beach, saw their local city councils ban dispensaries entirely. Of California’s 482 cities, only a total of 89 allowed recreational weed sales.
In cities like Los Angeles, where recreational weed is legal but extremely pricey due to added taxes, users can avoid the extra fees if they obtain a prescription from a doctor.
Recreational weed was supposed to offer easier shopping and more anonymity than medical weed, yet that also hasn’t turned out to be the case.
Numerous recreational dispensaries in California require shoppers to show their ID cards. The dispensaries then maintain information about those shoppers via “customer profiles” and other methods. That’s despite Proposition 64 not having any requirements that recreational shoppers identify themselves.
“When asked why customer profiles were created, several dispensary workers incorrectly stated the information was required under Proposition 64,” reports the Fresno Bee newspaper
Now for the Hard Part: Getting Californians to Buy Legal Weed
Jan. 2, 2019
In California, around $2.5 billion of legal cannabis was sold in 2018, half a billion dollars less than in 2017 when only medical marijuana was legal.
In California, around $2.5 billion of legal cannabis was sold in 2018, half a billion dollars less than in 2017 when only medical marijuana was legal
SAN FRANCISCO — A billion dollars of tax revenue, the taming of the black market, the convenience of retail cannabis stores throughout the state — these were some of the promises made by proponents of marijuana legalization in California.
One year after the start of recreational sales, they are still just promises.