Marijuana industry warns legal market could collapse
by: Ashley Zavala, Jose Fabian
Posted: Apr 20, 2022 / 07:17 PM PDT
Updated: Apr 21, 2022 / 10:43 AM PDT
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SACRAMENTO, Calif. (KTXL) — While 4/20 is a notable day for marijuana businesses, industry leaders continue to warn California’s legal market could collapse.
Marijuana growers and sellers said while Wednesday will be good for businesses, they’re at a tipping point with the state’s taxes and regulations.
“It’s gotten worse as an overall demand, and revenue being driven to the legal market has gotten worse,” said Jerred Kiloh, president of the United Cannabis Business Association.
Marijuana sellers like Kiloh said they need the state to ease up on the amount of taxes it collects and some regulations as the state’s industry is on the brink of collapse.
“This year, unfortunately, we’re in a point where the market has stopped growing, where the amount of licensed dispensaries has decreased,” said Nara Dahlbacka, a California Cannabis lobbyist.
Taxes and regulations are also hurting small growers like Johnny Casali, owner of Huckleberry Hill Farms
“I can’t imagine not doing something that I’ve been doing my whole life,” Casali said.
Casali said an oversupply of cannabis in the market has caused the price of triple-a flower to drop to $300 dollars a pound. He said $161 dollars of that gets cut by taxes, which is on top of other regulations he has to follow that also cost money.
“It’s even easy for a farmer like myself that’s not really highly educated to figure out that it just can’t work,” Casali said.
Shops are in a similar situation.
Experts said state-wide anywhere between 30% to nearly half of the price customers pay for legal products is going to state and local taxes. Because of those higher prices, they’re losing customers.
“The competition is taking away pretty much 30-40% of my business within the last year,” Kiloh said. “That is the illicit market. They just don’t have taxes and regulations and fees.”
State leaders have said they’re working on it. Several bills are circulating through the State Capitol to ease taxes and make cannabis more accessible across the state.
Mike Tyson lit up in Golden Gate Park on 4/20
Some advocates said they’re hopeful Governor Gavin Newsom will provide relief for them in his revised version of the state budget due in May.
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