by Bob Walsh
It is estimated that between 2/3 and 3/4 of the money spent on weed in CA is spent in the black market. Legal weed sold in CA has to be tested for THC content and contaminants so the buyers know what they are getting. This costs money. Also the taxes on the sellers are significant. (Black market sellers do not collect sales tax, shocking as that may sound.)
The California Department of Tax and Fee Administration determines the legal markup of legal weed every six months. The CA excise tax is based on this figure, which will go up to 15% as of January 1. The markup rate is determined by the CDTFE and the excise tax is levied against that figure. (So a legal weed dealer will pay a 15% excise tax on 80% of his gross as of January 1. That does not count normal city and state sales taxes and other general fees, as well as special fees levied against legal weed dealers. Some of these special fees run well into six figures per year.
Nobody KNOWS yet what this increase will do to the legal weed market. The tax will go up from $9.25 per dry ounce weight to $9.65 per dry ounce weight on cannabis flower products. (I guess the days of a $5 lid of Bakersfield Brown or Indiana Ditch Weed are long gone.)
EDITOR'S NOTE: I predicted this. Ha ha ha! The cartels must be rubbing their hands in glee. And they are increasing their shipments of meth in anticipation that pot legalization will lead to an increased use of this dangerous drug.
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