California is increasing pot business taxes in the legal market, shocking the state’s struggling marijuana companies.Hefty marijuana taxes that can approach 50 percent in some communities have been blamed for sending shoppers into the tax-free illegal market, which is thriving.Beginning Jan. 1, legal pot shops will have to shell out more to the state on the inventory they purchase from distributors. “It will definitely cause a problem for us,” said Tommy Pawloski, the manager of All about Wellness in midtown Sacramento. “It will cause a problem for the prices and increase prices for the consumers.” Owner Phil Blurton said he pays a fortune in taxes and fees, including a $ 22, 600 annual licensing fee to Sacramento, a $ 96, 000 annual licensing fee to California. Last year, his business operation tax was $ 400, 000, which he said most traditional businesses only pay $ 5, 000. On top of that, he said he pays the state sales tax of 8. 75%, plus the cannabis city tax of 4%, and a cannabis state tax of 15% on 60% of whatever product he buys from distributors.Net year, that number will jump to a 15% tax on 80% of the product he buys from distributors.Many believe the cost increase of legal pot will force even more consumers to buy off the black market.The California Cannabis Industry Association says its members are “stunned and outraged.” The group says the tax increases will be passed on to consumers, pushing more to shoppers to the black market.The association said an 8-ounce purchase of marijuana could cost about $ 10 more next year .— The Associated Press contributed to this story
LOS ANGELES –
California is increasing pot business taxes in the legal market, shocking the state’s struggling marijuana companies.
Hefty marijuana taxes that can approach 50 percent in some communities have been blamed for sending shoppers into the tax -free illegal market, which is thriving.
Beginning Jan. 1, legal pot shops will have to shell out more to the state on the inventory they purchase from distributors.
“It will definitely cause a problem for us,” said Tommy Pawloski, the manager of All about Wellness in midtown Sacramento. “It will cause a problem for the prices and increase prices for the consumers.”
Owner Phil Blurton said he pays a fortune in taxes and fees, including a $ 22, 600 annual licensing fee to Sacramento , a $ 96, 000 annual licensing fee to California. Last year, his business operation tax was $ 400, 000, which he said most traditional businesses only pay $ 5, 000.
On top of that, he said he pays the state sales tax of 8. 75%, plus the cannabis city tax of 4%, and a cannabis state tax of (% on) % of whatever product he buys from distributors.
Net year, that number will jump to a 15% tax on 80% of the product he buys from distributors.
Many believe the cost increase of legal pot will force even more consumers to buy off the black market.
The California Cannabis Industry Association says its members are “stunned and outraged.”
The group says the tax increases will be passed on to consumers, pushing more to shoppers to the black market. se of marijuana could cost about $ 10 more next year.
—
The Associated Press contributed to this story
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