Lawmaker Looking To Lower Marijuana Taxes To Encourage Legal Sales

SACRAMENTO (CBS13) — California lawmakers are looking to cut state marijuana taxes in an effort to get more pot producers and consumers to leave the black market.

Many businesses play by the rules, but those rules, when it comes to local and state taxes, can mean paying 45 percent more than what you would pay on the black market. Now some state lawmakers are trying to close that gap.

On the first day that recreational marijuana was legal in California, the CEO of Harborside Dispensary, Steve D'Angelo, warned the taxes were too high.

"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," D'Angelo said.

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And the numbers today seem to validate those predictions. Last year's state budget estimated $185 million in new taxes. The reality was off by nearly $100 million, with only $84 million generated

Assemblymember Rob Bonta (D-Oakland) said there are too many businesses operating in the illicit marketplace.

Bonta is working with the state treasurer to pass AB 286, a bill that would reduce the state marijuana sales tax from 15 to 11 percent. He said more legitimate sales means more money for California.

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"If you have one entity paying 15 percent tax, you'll get a lot less money than if you have 10 entities paying 11 percent tax," Bonta said.

For pot producers and consumers, a change cannot come fast enough.

"I don't think that the current tax rate for cannabis in California is sustainable," D'Angelo said.

Of course, the pot sales tax is not the only tax on marijuana. There is also the regular 6 percent sales tax, and any city or county taxes.

It may take reductions across the board to move most growers to a legitimate market.