California is preparing to sell recreational marijuana, but lovers of the drug are going to have to deal with hefty taxes first.
Retail sales in California will include a 15% tax on all goods connected to marijuana when the drug becomes legal for recreational use in 2018. However, local governments will also be allowed to add their own taxes for growing selling and more. This will cause prices to vary from city to city.
Current prices for medical marijuana sit at about $35 for a bag that can be used for five or six joints. However, the new taxes that are coming into place will likely see this price increase to between $50 or $60. The hefty price may be enough to scare off customers and keep the illegal market for the drug going strong.
Another problem that the high taxes on marijuana in California may bring is a reduction in legitimate business. The high taxes may weed out many people looking to start their own business selling recreational marijuana. There are also concerns that cities aren’t yet ready to hand out business licenses to pot growers, reports The Los Angeles Times.
There are also still concerns that the federal government may crack down on states that legalize marijuana, such as California. Here’s what Attorney General Jeff Sessions has to say on the matter.
I, as you know, am dubious about marijuana — as states can pass whatever laws they choose. But I’m not sure we’re going to be a better, healthier nation if we have marijuana being sold at every corner grocery store. I just don’t think that’s going to be good for us. We’ll have to work our way through that.
As of this writing, William White did not hold a position in any of the aforementioned securities.