Posted on 11/05/2017 7:37:00 PM PST by BenLurkin
On a retail level, it costs about $35 to buy a small bag of good quality medical marijuana in Los Angeles, enough to roll five or six joints.
But in 2018, when recreational sales take hold and additional taxes kick in, the cost of that same purchase in the new market is expected to increase at the retail counter to $50 or $60.
Medical pot purchases are expected to rise in cost too, but not as steeply, industry experts say.
Or consider cannabis leaves, a sort of bottom-shelf product that comes from trimming prized plant buds. The loose, snipped leaves are typically gathered up and processed for use in cannabis-laced foods, ointments, concentrates and candies. Growers sell a trash bag stuffed with clippings to manufacturers for about $50. But come January, the state will tax those leaves at $44 a pound.
That means the tax payment on a bag holding 7 or 8 pounds would exceed the current market price by five or six times, forcing a huge price hike or, more likely, rendering it essentially valueless.
“All it would become is compost,” predicted Ryan Jennemann of THC Design in Los Angeles, whose company has used the leaves to manufacture concentrated oils.
...
Come January, state taxes will include a 15% levy on purchases of all cannabis and cannabis products, including medical pot.
Local governments are free to slap on taxes on sales and growing too, and that has created a confusing patchwork of rates that vary city to city, county to county.
In the agricultural hub of Salinas, southeast of San Francisco, voters approved a tax that will eventually rise to $25 a square foot for space used to cultivate the leafy plants, a rate that’s equivalent to about $1 million an acre.
(Excerpt) Read more at latimes.com ...
That’s a lot of baby arms....
Good trellis work
I don’t see how that changes anything. You complained, I responded. The OP says “sticker shock” and shows prices going up steeply. I didn’t need my MBA degree to know that when prices go up, people look for alternatives. When they find those alternatives, the original “revenue streams” decrease.
So back to my original point. You claim that they’ll just buy it in the black market for cheap and legalization will be a cover for black market sales. So how do you explain the hundreds of millions in tax revenues that CO and WA are pulling in a year on sales in the billions?
That’s a big chunk of the market.
So back to my point that we haven’t seen the full impact yet. The OP says in 2018, taxes will raise the price from $35 to $55-$60. In 2018 we’ll see the black market boom as people want to keep their pot budget closer to the $35 dollar range. Basic law of supply and demand, particularly as high school and college students have limitations and habits. Basic market pressures in play here.
Here’s an article saying that the new taxes will be used to crack down on illegal pot growers in Colorado (i.e., the black market).
“A measure signed into law by Gov. John Hickenlooper sets aside nearly $6 million a year in Colorado marijuana tax revenue to reimburse police for investigating black-market marijuana activity that authorities say has increased since the state legalized recreational marijuana in 2012.”
https://www.usnews.com/news/business/articles/2017-06-08/colorado-marijuana-market-funds-busts-of-illegal-growers
The article indicates that the black market is hard to address because illegal growers wishing to market to out of state sales set up massive growing operations in rural areas that lack sufficient funds to police them. Those operations aren’t exactly going to dry up once the price jumps up.
On not in favor of legalization, but raising taxes, then using the tax money for enforcement, etc., just seems like they’re chasing their tails.
Yeah it seems like circular reasoning to me. :)
Finally, a tax liberals can hate
I’m reminded of the time Johnny Carson asked George Carlin something to the effect of “what can be done about the drug problem?” George responded “bring the price down”
Exactly!
A Guy told me that...
My Sister’s friends.
Yes ..thats the ticket.
Morgan Fairchild.
Yes.
Yeah we didn’t even weigh it.
“Har de har har. The irony is delicious.”
Government is a racket that would make Capone blush.
L
At which point, the state will sic the feds on them.
In San Diego back in the summer of 1968, we bought a kilo of run of the mill Mexican for $12.00 US delivered to our apartment. Could have gotten it for $8.00 in Tijuana. There were lots of seeds and sticks, but come on, man.
According to drug enforcement - no vested interest there, right? - and contrary to several other studies.
Thank you for digging that up. WHenever I look I have to wade hip deep through the distorted “studies” bought and paid for by the massive pot lobby. But when I post stuff like that, the pot heads flat out don’t care. Pot’s negative effects on motivation, memory and learning are well documented but pot heads don’t care. They change the subject and go on their merry ways. Marijuana must flatline empathy as it creates emotional dependence; that must be it.
ROTFLMAO!
Wow! I’m RIGHT! Pot shrinks the part of the brain that handles empathy!
“The scans revealed that smoking cannabis every day was associated with shrinkage in the orbitofrontal cortex (OFC) region of the brain, which is involved in mental processing and decision making.
It also influences responses to rewards and adversity, and is strongly linked to empathy – the ability to sense other people’s feelings.
Neuroscientists believe damage to the orbitofrontal cortex may underpin some forms of psychopathy.”
That explains why the pro pot lobby just doesn’t care about anything but getting access to it.
You're the one who can't seem to sense the feelings of drug enforcement agents confronted with a potential reduction of their sphere of authority and their budget.
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