This week, a California city lowers its sales tax on recreational cannabis to compete with the black market. Officials in Berkeley, California argue that tax-abiding marijuana dispensaries aren’t able to offer the same low pricing as black market dealers due to the state’s heavy tax program.
Details About The Tax Cut
The tax on recreational marijuana went from 10 percent to 5 percent this week. This tax reduction is only on the city-level. Including state taxes, the total tax on marijuana in Berkeley will be 30 percent. While this might seem high, it’s actually one of the lowest tax rates in the country.
California law mandates that cannabis consumers pay a city tax, sales tax, cultivation tax and state excise tax. In some places, this means a 45 percent tax on marijuana.
But even Berkeley’s lowered tax seems excessive. As marijuana shopper Robert Fracisco told CBS, “A 35% tax is pretty excessive for anything.”
Why Berkeley Lowered Their Tax On Marijuana
Legal cannabis sales in California are dwindling while the black market is experiencing a boom in business. A few months after