Posted on 06/13/2023 1:21:59 PM PDT by nickcarraway
Warning lights continue to flash bright red for California’s cannabis industry as companies struggle to pay their bills, legal cannabis sales continue to drop and pot tax revenue falls for the seventh straight quarter.
The latest tax figures released by the California Department of Tax and Fee Administration, or CDTFA, showed that cannabis excise taxes fell a whopping 18.8% in the first quarter of 2023. That’s the seventh quarter in a row in which excise tax collections have fallen for the industry.
The falling tax revenue is the latest domino to fall in what appears to be a long-brewing economic crisis in the industry. Farmers have been reporting for years that they’ve been stiffed by distributors, distributors say that they’re not being paid by retailers, and now tax revenues are in a free fall.
California’s legal market also continues to shrink. Total cannabis sales in the first quarter of 2023 were down 1.4% from the previous quarter, continuing a multi-year trend of falling revenue for pot stores statewide.
Marc Hauser, a cannabis consultant and former attorney specializing in the cannabis industry, said the downturn is a combination of less consumer spending because of the end of the pandemic, when people bought more cannabis, and continued stress from high tax rates on the industry.
“I think it is really dire out there for the vast majority of cannabis operators,” Hauser told SFGATE in an email. “It has been for some time, and I honestly don’t see anything on the horizon that will change it.”
The CDTFA reported that $104.2 million in cannabis excise taxes was collected in the first quarter of 2023, down more than 32% from tax collections during the same quarter a year earlier. The latest drop means that the state’s cannabis excise tax revenue has dropped for seven consecutive quarters, falling 42% since the second quarter of 2021, when the state brought in $180.4 million in cannabis excise taxes. California charges a 15% excise tax on legal cannabis products, in addition to state sales tax and any local taxes charged.
Whatever you tax you get less of......................
Wellll,lets see...It couldn’t be because of black market pot...Noooo......It most certainly couldn’t be because people grow their own,right???
No offense to the FReepers who always reply if I mention marijuana.
The CA government should have celebrity TV ads promoting drug use to get more tax revenues.
Woody Allen was punished for satirizing the Catholic Church by showing a humorous cigarette ad in his movie. The priest smokes one and says “I smoke ‘em. He smokes ‘em.” (looks heavenward).
How was Woody Allen punished. I don’t think so.
Maybe the demonrats running California should ask their partners in crime, the Cartels, to pay some taxes on the weed they are selling under the table??
Should they have celebrities doing ads for tobacco cigarettes?
So does the cost of treating pot addicts also drop?
Something tells me that the chicanos in san bernardino dont have a real need to get fresh buds from a store. Every other one of their hombres is holding stash. And i just really doubt theres any law enforcement anymore on college geeks selling weed to their friends.
Two words: Laffer Curve.
I knew the added cost of government regulations would enable the black market to win out. Some of that weed that started out legal in California and is retailed package is already being sold on the streets in NY because they produce more than can be sold back there. Plus more people are starting to grow it themselves.
Looks like we need some good, old-fashioned, all-American price supports for cannabis farmers!
CBD oil is legal in all 50 states now, no? It’s what the e-mails tell me.
When you defund the police, there’s no one around to investigate and find the home grown patches that people use rather than buy it. Cost effective, industrious, raises munchie profits, and cuts down the incoming cartel stuff. Win/win/win. Newsome just doesn’t understand how good a job he’s doing by accident.
wy69
Did they actually defend the police?
Dope will get you through times of no money better than money will get you through times of no dope.
The leftards refuse to adhere to the advice from The Gipper, ‘whatever is taxed more you get less of it’.
Costs me $180 an oz for top shelf but I was already friends with my dealer so I probably get a price break. Just 4 years ago I was getting top shelf for $125. There was a lot of weed inflation because of the lockdowns with more people smoking it more often stretching supply issues for a bit.
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