LA's staggering cannabis problem could cost the city $400M

cawacko said:
It's a combination of high taxes and a lot of burdensome regulations that forces shops to have charge much more.

I'd love to find the old threads we had here discussing this with people saying (and I remember Desh saying this) legalize it and tax the sh*t out it. Well...
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lol. Yeah. And me saying: If you tax it too much nobody will buy it from the shops.
 
Damocles said:
lol. Yeah. And me saying: If you tax it too much nobody will buy it from the shops.
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I’ve never smoked weed, but here’s how I envision it. All things being equal, most people would rather buy it legally. But if you’ve spent your whole life getting it on the black market, and the legal stuff comes with a hefty premium, there’s a good chance you won’t switch unless money is no issue.
 
cawacko said:
I’ve never smoked weed, but here’s how I envision it. All things being equal, most people would rather buy it legally. But if you’ve spent your whole life getting it on the black market, and the legal stuff comes with a hefty premium, there’s a good chance you won’t switch unless money is no issue.
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In my state, costs of pot have gone way down. About one third the price on the black market.
 
cawacko said:
I’ve never smoked weed, but here’s how I envision it. All things being equal, most people would rather buy it legally. But if you’ve spent your whole life getting it on the black market, and the legal stuff comes with a hefty premium, there’s a good chance you won’t switch unless money is no issue.
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Particularly when going to the black market has nearly zero consequences for the buyer...
 
volsrocks said:
The legal cannabis market in Los Angeles is hitting a breaking point. At least two-thirds of LA weed businesses have failed to pay their local taxes, and the city is currently out hundreds of millions of dollars in lost revenue.

The LA cannabis market, which is the largest in the state, has been struggling for years. The city has failed to shut down a thriving illicit market, which has attracted customers to tax-free products, while legal shops are saddled with high taxes and regulatory costs.



Make it legal they said..no more illicit market for it they said

Tax it make money they said

:magagrin:




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Dunce-o-crats can't even deal weed properly.
 
It's not all taxation. In CA they have slow walked licenses to sell, they do not treat it like alcohol as required in CO where the price dropped "bigly" after an initial increase. Shoot in LA they didn't issue their first license until 2 full years after the state legalized it in 2018. So you either drove to where one of the few licenses were to buy it legally or you bought it from Bob.

The effective tax rate is massive on cannabis in CA though.

High Taxes + Local Tax Stacking (Effective Tax Rate ~40–50%)​

Tax LayerRate
State excise tax15%
State cultivation tax$9.65/oz flower (pre-2022)
Local business tax5–10% (LA: 10%)
Sales tax7.25–10.25%
Total effective tax~38–50%
  • Example: $50 wholesale → $100+ retail just from taxes.
  • Illicit market: $0 tax → $150–200/oz vs. $350–450/oz legal.
 
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