Just a few months into California's foray into legal marijuana, some lawmakers are suggesting high taxes are pushing buyers back into the black market.
A bipartisan pair of state lawmakers are proposing to lower taxes on legal cannabis in California, at least for three years.
Assemblymen Tom Lackey, R-Palmdale, and Rob Bonta, D-Oakland, proposed Thursday to dial back the state tax rates to encourage buyers to patronize legal shops.
Lackey, who spent 28 years in the California Highway Patrol, said the cumulative tax burden is high for an industry being regulated for the first time.
"Without tax relief to make taxes more affordable, we will continue to empower California's mature black market," Lackey said.
Criminals don't pay taxes, check IDs to avoid selling to underage buyers or follow safety regulations, Lackey added.
The state imposes a 15 percent excise tax, then local governments can add taxes, too, which vary around the state. There are separate state taxes on cultivation, along with regular sales taxes. There are new costs for testing and distribution, which could also be rolled into the counter price.
Generally, an eighth of an ounce of good-grade pot, enough to roll five or six joints, sells for around $35 in legal shops in the Los Angeles area. Direct taxes alone would slap over $12 on that price: the 15 percent state excise tax, the city's 10 percent tax on recreational purchases, and the usual sales tax, nearly 10 percent.
Store policies appear to vary on how much of that cost is reflected in the advertised price on websites.
State cultivation taxes include $9.25 for each ounce of cannabis buds, and $2.75 for an ounce of leaves, which can also be included in the sales price.
The lawmakers' proposal would trim the state excise tax to 11 percent from 15 percent, and suspend the cultivation taxes for three years.
According to one estimate, the proposal would cut the cost for consumers at the sale counter by 9 percent, they say.
The state has estimated it would collect as much as $1 billion in marijuana taxes within several years. It wasn't immediately clear how deeply the proposed cut would reduce that revenue.
The Associated Press contributed to this report.
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