Weaker-than-expected marijuana sales ding California budget

[USFREEDOM911]

Weaker-than-expected marijuana sales ding California budget

California is paying a price for the shaky rollout of its legal marijuana market.

State budget documents released Thursday show the Newsom administration is sharply scaling back what it expects to collect in cannabis tax revenue through June 2020 — in all, a $223 million cut from projections just four months ago.

The reduced income for the state treasury means that slower-than-expected pot sales are punching a hole in California's budget.

The diminished optimism for retail pot sales comes as shops continue to be undercut by a thriving illicit market, where consumers can avoid taxes that can approach 50% in some communities.

Meanwhile, state regulators have struggled to meet the demand for licensing, and many communities have either banned commercial sales or not set up rules for the legal market to operate.

Gov. Gavin Newsom said it was likely to take five to seven years for the legal market to reach its potential, a point that he has made repeatedly in the past.

But he also pointed a finger at local communities that have been resistant to legal sales and growing.

"It takes time to go from something old to something new," Newsom said in Sacramento.

"We knew (some counties and cities) would be stubborn in providing access and providing retail locations and that would take even longer than some other states, and that's exactly what's happening," he added.

Josh Drayton of the California Cannabis Industry Association credited Newsom with taking a clear-eyed view of the slow-emerging market and scaling back tax projections, accordingly.

"I think this administration is being more realistic about the challenges faced by the regulated market," he said.

A projected windfall of tax revenue was a major selling point for legal cannabis in California. In fact, Proposition 64, the law approved by voters in 2016 that opened the way for legal pot sales for adults, outlined a long list of programs that would benefit from tax dollars collected from pot sales.

State taxes include a 15% levy on purchases of all cannabis and cannabis products, including medical pot. Local governments are free to add taxes on sales and growing too, which has created a confusing patchwork of rates around the state.

The market is growing, just not as fast as once expected.

The state projects the 15% cannabis excise tax will pull in $288 million for the year that ends in June, and $359 million the following year. That's a cut of $67 million and $156 million, respectively, from the governor's January budget forecast.

It's now appears certain that the state will fall short of earlier projections, when it expected to collect $1 billion in new tax revenue annually from pot within a few years.

According to the state Finance Department, the excise tax projection was reduced after seeing no growth in the final quarter of 2018. Additionally, the number of places where you can buy legal pot remains limited.

-----------------------------------------------------

But it will reduce the Black Market, they said.

[Yurt]

It has reduced the so called black market. People who were too afraid to buy Marijuana can now purchase it legally in stores. The so called black market of course is alive and well. You can't just overturn a market simply by making a product legal. People have been purchasing Marijuana off market, if you will, for decades, they aren't going to run to 7/11 just because they legally sell MJ.

And....

Newsom is a scumbag whom I never believed would have made it out of San Fransicko.

[USFREEDOM911]

It has reduced the so called black market. People who were too afraid to buy Marijuana can now purchase it legally in stores. The so called black market of course is alive and well. You can't just overturn a market simply by making a product legal. People have been purchasing Marijuana off market, if you will, for decades, they aren't going to run to 7/11 just because they legally sell MJ.

And....

Newsom is a scumbag whom I never believed would have made it out of San Fransicko.

When did THRIVING, mean REDUCED

The diminished optimism for retail pot sales comes as shops continue to be undercut by a thriving illicit market, where consumers can avoid taxes that can approach 50% in some communities.

[Yurt]

Go smoke a joint legion

[USFREEDOM911]

Go smoke a joint legion

Legion hasn't posted, Mason.

[Bobb]

Legalized pot could instantly kill a black market. Do you want to buy high quality and safe bud from an honest seller, from a nice store, rather than throw dice in a back alley black market, and subsidize violent criminals in the process.

California's problem is that it legalized growing pot long before there were pot stores, so home-growing became well entrenched (rather than just the domain of relatively few criminals, as it was before legalization). California's other problem is intense regulation and high taxes makes legal pot uncompetitive with black market pot. Home-growing will fade if legal pot becomes more competitive.

[Yurt]

Legion hasn't posted, Mason.

OK, Snarla

[Yurt]

Legalized pot could instantly kill a black market. Do you want to buy high quality and safe bud from an honest seller, from a nice store, rather than throw dice in a back alley black market, and subsidize violent criminals in the process.

California's problem is that it legalized growing pot long before there were pot stores, so home-growing became well entrenched (rather than just the domain of relatively few criminals, as it was before legalization). California's other problem is intense regulation and high taxes makes legal pot uncompetitive with black market pot. Home-growing will fade if legal pot becomes more competitive.

Valid point. Thank you for sharing.

[FUCK THE POLICE]

It has reduced the so called black market. People who were too afraid to buy Marijuana can now purchase it legally in stores. The so called black market of course is alive and well. You can't just overturn a market simply by making a product legal. People have been purchasing Marijuana off market, if you will, for decades, they aren't going to run to 7/11 just because they legally sell MJ.

And....

Newsom is a scumbag whom I never believed would have made it out of San Fransicko.

Yeah so extreme in San Fransisco, marrying gay people while you whined for a decade then pretended to support it because your a lying piece of shit.

[FUCK THE POLICE]

Death to rightists, death to America, death to Israel. Long live communism and Islam!

[USFREEDOM911]

OK, Snarla

Right on, Jack.

[canceled.2021.2]

Shocking that another leftist scheme doesn’t bring in as much money as they claim