California currently taxes all marijuana twice.
According to a new report by the Legislative Analyst’s Office, Marijuana sales should be taxed on THC content or total amount of sales.
Weight and Excise
The report goes on to say that all marijuana and cannabis taxes should be taxed at the point of sale rather than earlier on in cultivation and production.
Currently all marijuana is taxed in California twice: Once by the overall weight of marijuana that is grown, and again with a 15% excise tax when sold at a store.
The new recommendations come after a large rise in black market marijuana in California, a complicated marijuana tax structure, untested dangers in black market marijuana, and a growth in THC-infused foods.THC, which is the compound in marijuana that produces a ‘high’, has not yet been strictly targeted in general cannabis sales in California.
“Most legal weed places in the state have wanted this for awhile now,” said Marijuana policy expert Ajay Laghari. “It’s not only about fighting back against black market marijuana dealers. No, this largely about safety too. Black market weed can have a lot of dangerous chemicals in it because you don’t know where it’s grown.”
“And there’s different THC levels in different types of marijuana. At a store, you know exactly what you’re getting and how much you can handle. Buying on the black market is a roll of the dice. It’s like if all cigarettes were marked simply as ‘cigarettes’. You don’t know if they’re filtered, or if they’re menthols, or if they’re low-tar, or if they’re simply herbal cigarettes. All you know is that you’re getting them and it can negatively affect you.”
“Taxing by THC levels makes total sense because prices can stabilize a bit, continue to give the consumer good info, and really come closer to black market or street sales.”
“Legal sellers could finally compete with them again.”
A tax on THC
Many lawmakers currently have copies of the report and may be taking action soon. With state cannabis taxes going up again on January 1st, a bump in black market sales is very likely. This is making the $0.006 and $0.009 per THC milligram tax replacing the weight tax more attractive to lawmakers.
“I’m unsure,” said Michael, who owns a legal cannabis shop in Los Angeles County. “If we change to THC, strictly THC, then that’s going to require a lot of testing. Weighing is really quicker.”
“But it also does make sense to me. Buying weed on the street – it can have a lot of stuff in it man. It could be fooling some kids with oregano or it could have angel dust on it. In a store you know what you’re getting.”
“It’s like buying moonshine. You don’t know how safely it’s made, and who knows, they could put rubbing alcohol in it and make you blind like what happened during prohibition.”
“Anything that makes it safer and lets us give customers a safer product is fine by me. More than fine really.”
If the tax is changed by lawmakers to a THC-based tax, California would be the first state in California with such a law.
Possible changes to the tax could come as soon as next year if the reports recommendations are acted upon.