Topic: Taxation

Happy Holidays! Cannabis Regulators Announce Higher Taxes and Suspend Cannabis Permits in California

California cannabis businesses and consumers have faced a rash of challenges as state agencies hike taxes and suspend business licenses. There is no sign of let up. On November 21, the California Department of Tax and Fee Administration (CDTFA) announced hikes on next year’s cannabis mark up and cultivation tax rates. Effective January 1, 2020, the newest mark up rate will increase from 60% to 80%.

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It’s Complicated: Tax Revenue From Recreational Marijuana Remains Difficult to Estimate

“In this world nothing can be said to be certain, except death and taxes.” The Works of Benjamin Franklin, 1817. That idiom remains true today, and with the legalization of recreational marijuana markets, it was widely accepted that the taxes would allow state and local governments to plug budgetary shortfalls.

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Illicit Market Continues to Stifle California’s Legal Cannabis Market

It’s been nearly two years since California legalized recreational marijuana, and despite promises to curtail the illegal market, California’s black market continues to thrive. In 2018, according to estimates, about 78% of all marijuana sales in California occurred on the black market. That number (and the associated lost revenue for legal marijuana-related businesses and the California treasury) is frightening.

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SAFE or UN-SAFE? U.S. House Committee Hears Testimony on Proposed Secure and Fair Enforcement Banking Act

“Duffel bags and sometimes suitcases of cash would arrive quarterly at some of our designated offices and some business owners had to drive 350 miles to pay their taxes.” That was the testimony of Fiona Ma, California’s State Treasurer, regarding the difficulties legal cannabis-related businesses and state officials have in paying and collecting taxes given the dearth of legitimate financial services available to such businesses.

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