Sales of marijuana in California are stronger than ever, just not the legal kind. New taxes drove consumers into the arms of the black market following the legalization of adult-use sales.
Instead of backing off, on Jan. 1, 2020, California raised taxes on cannabis even further. The mark-up rate for arm's length transactions (meaning buying cannabis from an outside vendor rather than producing in-house) increased from 60% to 80% and the cultivation tax rose from $9.25 per ounce to $9.65 per ounce.
Exorbitant taxation isn't the only deterrence that multi-state operators face in California. In November, the state suspended 407 permits for marijuana businesses that hadn't taken the necessary steps for the track-and-trace program, effectively halting operations of retailers and the distributors they rely on.