XPost: ca.politics, alt.california, alt.support.marijuana   
   XPost: alt.economics   
   From: a425couple@hotmail.com   
      
   CBS NEWS January 2, 2018, 4:26 PM   
   California pot advocates say tax rates too high   
      
   OAKLAND -- Marijuana dispensaries across California experienced long   
   lines on the first day of legal recreational pot sales. But advocates   
   warned the legal industry won't survive without big changes, CBS SF Bay   
   Area reports.   
      
   "I'm very happy about – thrilled really – to see the legalization of   
   cannabis in California," said Steve DeAngelo, co-founder and CEO of   
   Harborside in Oakland. "At the same time, I'm terrified about what's   
   going to happen with these taxes."   
      
   Harborside has been a medical marijuana dispensary for more than a   
   decade, and is now selling recreational marijuana at a much higher price.   
      
   "In our shop here, the tax rate has gone from 15 percent all the way up   
   to almost 35 percent for adult consumers," DeAngelo said.   
      
   steved.png   
   Steve DeAngelo CBS SF BAY AREA   
   Here's how that math works for Harborside. There is the regular state   
   sales tax of 6 percent, and the regular Alameda County sales tax of 3.25   
   percent. Then there is a 15 percent state tax on marijuana, and a 10   
   percent Oakland tax on recreational marijuana.   
      
   Total taxes: 34.25 percent.   
      
   "That is a huge hit. And it's going to mean that a significant number of   
   people, less affluent consumers, are going to turn to the lower prices   
   of the underground market," DeAngelo said.   
      
   Some customers are willing to pay a premium for quality product, such as   
   Geno Escalante, who was among those in line on Monday.   
      
   "We all want the best stuff and you know the best stuff is always here   
   at Harborside," Escalante said.   
      
   geno.png   
   Geno Escalante CBS SF BAY AREA   
   DeAngelo said the black market may be lower cost, but Harborside offers   
   hundreds of products not available on the black market and they also   
   offer consumer protection.   
      
   "All of our medicine is tested in a laboratory," DeAngelo said. "It's   
   evaluated both for safety, for things like pesticides and pathogenic   
   molds, and it's also evaluated for potency."   
      
   Still, all this protection isn't cheap. In addition to taxes, marijuana   
   regulations drive up the cost.   
      
   "We have to pay rent, we have to have security systems, we have to pay   
   licensing fees, we have to have insurance, we have to buy equipment,"   
   DeAngelo said.   
      
   It adds up. And not everyone can pay the higher prices. People who are   
   disabled or on fixed incomes may turn to the black market.   
      
   "They can barely afford cannabis now, much less with a 35 or 40 percent   
   tax increase," DeAngelo said.   
      
   When people aren't buying from a regulated business, the state is   
   getting zero taxes.   
      
   Colorado, Washington state and Oregon each legalized marijuana at one   
   tax rate and then had to lower the rate to keep people in the legitimate   
   market. DeAngelo believes California will have to do the same.   
      
   "I don't think that the current tax rate for cannabis in California is   
   sustainable," he said.   
      
   Escalante agrees. "I honestly don't think this tax is gonna last too   
   much," the customer said. "They'll see that cannabis is not bad. It's a   
   plant."   
      
   DeAngelo said it makes no sense that marijuana is taxed so much more   
   than alcohol. California taxes beer and wine at 20 cents a gallon. That   
   amount has not changed since 1991.   
      
   As for federal alcohol taxes, the new tax law taking effect next year   
   decreases the taxes on beer, wine and spirits.   
      
      
   Editor's Note: The video references a 5 percent Oakland tax on   
   marijuana. The 5 percent tax is on medical marijuana. Recreational   
   marijuana in the city is taxed at 10 percent.   
      
   © 2018 CBS Interactive Inc. All Rights Reserved.   
      
   https://www.cbsnews.com/news/california-pot-advocates-say-tax-ra   
   es-too-high-legal-recreational-marijuana/   
      
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