Thanks to overregulation and overtaxation, the U.S. government has blown the easiest revenue opportunity ever—legalized drugs. But it’s not too late to save the $72 billion cannabis industry from the perils of prohibition.
from San Francisco to Humboldt County, through a few cool redwood groves, Johnny Casali turns on a wood chipper and empties 55 pounds of pot into the chute. Casali grew cannabis illegally under the California sun for four decades. Now a state-licensed grower, he’s destroying what used to be his cash crop.
Some 95% of California cannabis cultivators operated at a loss last year, according to Jonathan Rubin, CEO of New Leaf Data Services, an institutional-grade wholesale price tracker. With the wholesale price of pot per pound in California down 52% since 2017, the year before legal recreational sales started in the state, squeezing out a profit is nearly impossible. The trouble boils down to simple supply and demand.
Amid collapsing prices, the legal weed industry shoulders a tremendous tax burden that its illicit competitors don’t. State taxes on retail sales are as high as 37%. And although marijuana remains illegal under federal law, Uncle Sam still holds out his hand for a big cut; pot companies are not allowed to take most normal business deductions, leaving them with an effective tax rate of 60% or more.
“What is legalization doing to small business owners like myself? It’s killing us,” Senter says. “It’sus.” By “legalization,” of course, she means regulation. Everyone loves the idea of a fair, transparent market. It’s the mandates and fiats that are killing legal weed—more specifically, the balkanized nature of those regulations. Without federal legalization, anyone trying to create a marijuana business at scale has to ponder 38 sets of rules, reporting standards and tax regimes.
Compare the difficulty of working within a state, across multiple states and amid a thicket of tax regimes with the established black market, which has to deal with none of that, and you can see why the typical person smoking a joint probably obtained it illegally. “There’s an economic disincentive to participate in the legal market,” says Emily Paxhia, who cofounded Poseidon, a San Francisco cannabis investment firm with $200 million in assets under management.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Weed vs. Greed: How America Botched Legalizing PotThanks to overregulation and overtaxation, the U.S. government has blown the easiest revenue opportunity ever—legalized drugs. But it’s not too late to save the $72 billion cannabis industry from the perils of prohibition.
Read more »
Word of Mouth: Testing Weed-Infused Chewing GumEach piece releases THC extract within two minutes.
Read more »
Arresting illicit weed sellers repeats our drug war mistakes | EditorialDo they front a Bulgarian cartel? Do they send customers to the hospital? If not, then stop.
Read more »
Learjets, Mistresses, and Bales of Weed: My Dad's Life as a Drug KingpinDan McGuiness was one of the architects of the modern drug trade: creating a marijuana empire, ordering up Learjets, escaping from prison, and more. Now, his daughter reports on the life and times of the father who never came home.
Read more »
Elon Musk about Brittney Griner prisoner swap deal: ‘Maybe free people in jail for weed here too?’Elon Musk has something to say about the situation involving WNBA star Brittney Griner, who was caught with cannabis vapes at an airport near Moscow. — via TheGrowthOp cannabiscommunity cannabisculture
Read more »
Elon Musk says Joe Rogan weed puff meant random drug tests for him, SpaceX employees: 'A lot of backlash'Elon Musk admitted in a recent interview that smoking marijuana on the 'Joe Rogan Experience' podcast in 2018 was damaging to SpaceX due to federal contracts.
Read more »