California again... They legalized it and proceeded to tax the hell out of it. From Sacramento, CA station KCRA
Illegal pot sales outpace legal cannabis in California
California’s marijuana industry is undergoing some severe growing pains -- and it’s much bigger than just licensing permits.
Nearly two years after recreational marijuana became legal in California, the black market is still much bigger than legal sales of marijuana.
At All About Wellness, a Sacramento pot shop, business is thriving. In fact, owner Phil Blurton is planning to expand into a bigger building next month. But, he’s also worried about his illegal competitor who don’t pay taxes.
“Our city license now is $20,000 a year,” Blurton said. “The state license is $96,000. Then we pay 8.75% sales tax to the state."
Blurton said he also pays an additional 4% cannabis tax to the city, on top of an additional 15% tax to the state, “which is making the cost of our product so expensive the black market is booming now.”
It's booming to the tune of $8.7 billion in illegal sales this year. That’s more than double the legal market, according to an industry report released by BDS Analytics.
Yikes - talk about an egregious level of taxation. That is not sustainable for any business unless they jack their prices up to well above "traditional" pot prices. No wonder the "black market" sales are going so well.
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