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The Union: George Boardman: Cannabis taxes, regulations are thwarting the will of the people
- Laura Braden
- Jun 16
- 2 min read
EXCERPT:
It has been observed that the power to tax is the power to destroy, and California’s state and local officials are testing that truism in an attempt to destroy the cannabis industry.
That’s the only conclusion you can draw when you look at the tax and regulatory burden people in the legitimate cannabis trade have to shoulder. It gets heavier July 1 when the state excise tax increases from 15% to 19% unless a bill before the state Legislature passes to freeze the current rate.
The tax increase couldn’t come at a worse time: An estimated 15% of the state’s pot retailers are behind on their taxes, and legal California weed is already the most expensive in the country.
That would explain why 60% of the cannabis consumed in the state is illegal. California consumption is about 3.8 million tons a year, meaning 2.4 million tons are supplied from unlicensed cannabis operations and consumed in California.
If the legal market had been established in a way that helped it grow and thrive, it would be generating millions more in dollars for a state in desperate need of revenue. Other states such as Michigan, with a quarter of our population, sell more cannabis per person.
Fans of conservative economist Arthur Laffer are nodding their heads at this point. Laffer is best known as the creator of the Laffer Curve, which postulates there is an ideal tax rate that will generate the maximum amount of tax revenue. Revenue declines if the tax rate is too high because people don’t work as hard and look for more ways to avoid taxes.
