As we've been opining, the endless fees, taxes and regulatory compliance costs that politicians assume can be slapped on cannabis bode to be one of the biggest reasons that legal cannabis businesses won't be able to compete with the underground market anytime soon, and why we may be witnessing a possible collapse of the legal industry in states like California….
Leaving us with illegal, unregulated and unnecessarily unsafe products, criminalized customers, problems law enforcement will never be able to solve – as shown by their complete inability to solve them over the last 80 years – despite trillions of tax dollars spent, millions incarcerated, hundreds of thousands killed (in Mexico alone), economies destroyed (in various countries), and more of the litany of failures of society's previous efforts.
Granted, the "endlessly elastic sin tax" model has mostly "worked" with alcohol and cigarettes where the final products are very proprietary and hard to duplicate, and in the case of alcohol products, very bulky to store, transport and get to buyers.
But cannabis is a hardy weed. Good stock is readily available, and product is far less bulky than six packs and liters in an endless array of fragile glass bottles, etc.
Further, the techniques for extracting cannabinoids aren't all that complicated, and the final look isn't that important. Generations have gratefully accepted plain, unlabeled baggies of cannabis.
So these high taxes and other costs (as noted above, plus, for example, hiring superfluous pharmacists with little to do except "look medical" and supposedly wisely specify "appropriate medicinal form dosage parameters") only threaten the ability of legal, ethical, law-following businesses to keep their doors open, and in the end DEPRESS the revenue the states would receive with low, simple taxes and fair regulations.
In a more rational only fees as needed approach, businesses are actually incentivized to comply because it's the simplest thing to do, and all (well nearly all) will pay – bringing more revenue and far lower enforcement costs to the states, consumers will be protected, products will be better, stigmas will fade and we can all begin to move on from reefer madness.
But given prevailing attitudes among those still caught up in the prohibition mindset, and how they keep recreating the old side effects of the drug wars, sadly that's more fairy tale than reality to today.
"When will they ever learn…."
After having avoided an increase in state taxes on legal marijuana, California officials changed course Thursday and announced MJ excise and cultivation taxes will go up effective Jan. 1. High state and local tax rates have