The new year brought new taxes to the cannabis community.
The new year brought new taxes to the cannabis community, with the California Department of Tax and Fee Administration announcing a tax hike on cannabis cultivation starting on January 1, 2022. However, from my perspective as executive chancellor of Oaksterdam University, this move could have a detrimental impact on the legal cannabis industry.
Back in 2009, the very first “tax cannabis” initiative found success in Oakland, California, where roughly 80 percent of voters voted in favor of a medical marijuana tax of 1.8 percent in gross sales. In fact, Oaksterdam University founder Richard Lee, as well as other industry players, helped lobby for the tax’s inclusion on the ballot.
We at Oaksterdam have always advocated for a safe, regulated and taxed cannabis market, but we oppose this increase on farmers. The race to extract more fees and taxes, starting with the farmer, has a negative effect on the end consumer, as well as the entire industry.
Why should you care if you don’t even smoke weed? Because the potential result I see is a booming illicit market that empowers and enriches drug cartels.
Raising taxes is the opposite of what we as cannabis advocates are working hard to accomplish, which is to lower barriers in the industry. Raising taxes in an already over-taxed market could bolster the incentives to stay illicit and pay no taxes or fees. The higher cannabis taxes rise, the harder it could be for legitimate businesses to compete with unregulated growers and sellers.
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