Fears of a 10 percent tax

Discussion in 'Marijuana News' started by oltex, Oct 8, 2010.

  1. Fears of a 10 percent tax
    DrugWarRant / Pete Guither / 10,8,2010

    Some of the stuff that comes out in the circus of the upcoming Prop 19 vote is just amazing.

    Scott Erickson writes in the Daily Caller: If pot is legalized, government will distort the market for it

    What many in the drug legalization crowd fail to recognize is that government, in its infinite wisdom, will ultimately distort this newly legitimate marketplace to such a degree that it will render the perceived benefits of its creation insignificant. In its zeal to capitalize on what it sees as a major new source of revenue, government will popularize marijuana use among the general public and, through overzealous taxation and regulation, fail to reduce the aforementioned black market and all of its attendant criminality.

    Case in point: California's Proposition 19, while not setting a uniform standard for taxation of marijuana across the state, will allow individual localities the leeway to set their own standards of taxation on the sale and cultivation of marijuana. If Proposition 19 and Measure C - a related measure linked to the passage of Prop 19 - pass, localities will be able to tax marijuana at rates upwards of ten percent.

    While Proposition 19 would make the possession and recreational use of marijuana legal in California, levying a ten percent tax on those selling it lawfully, coupled with a host of other fees related to its cultivation, will increase its cost to such a degree that many pot smokers will simply continue to buy their weed from sources unencumbered by the state's regulations, e.g. drug dealers.

    This does not bode well for the proposition that legalizing “harmless” drugs such as marijuana will lessen the prevalence of illicit drug dealers.

    Upwards of 10 percent? You're kidding. California's sales tax is 8.25%. 10 percent is nothing. At a 10 percent tax, there's no way that the black market could compete. Plus, the fact is, consumers prefer to purchase legally and are willing to pay quite a significant premium to do so.

    So localities would have quite a bit of leeway in adding taxes. Their biggest concern will be competition from other localities. If one town raises taxes too high, the neighboring town with lower cannabis taxes will benefit from greater sales.
  2. A 10% tax is lower than taxes on alcohol and cigarettes in many states. Right now, $300 for an ounce of good quality weed is a decent deal on the streets in the black market. When legal, an ounce would likely be around $50 before tax and a whopping $55 after this supposedly god awful 10% tax. Some people are just stupid.
  3. When the feds remove prohibition of marijuana,it will be grown in thousand acre fields and
    will be much cheaper than $50 an oz.

    Until the commercial grows are up to speed,the price will fluctuate from area to area as local growers start reacting to a legal market with pricing based on supply and demand
    instead of green market prices.

    If you figure on four months before the first commercial indoor grows harvest,it could get real interesting.
  4. Exactly. If an ounce is going for a legal $50, then even paying $100 at 100% sales tax is a HUGE price drop. I'd pay $100 an 1/8th if I could just walk down to the 24 hour corner store to pick it up.
  5. Hahahaha.

    You and me wish it would only be $50 an ounce, but don't begin to fool yourself. The original plan was to sell eighths for $50 and put a $5 tax on them. I mean, think about it. If you sell an ounce of dank for $55 (tax included), casual smokers wouldn't need to go back for weeks, maybe months (which loses profit). Not only that, but who's to say somebody won't buy it for $55 and flip it on the streets again for $200+? Don't forget that high schoolers and even middle schoolers are going to want to smoke, and there will always be people who are looking to make a profit through them.

    Honestly, I see prices dropping to maybe $250 an ounce in the long run, but definitely not anytime soon after the bill is passed.
  6. If it's legal the highschoolers will find 18 year olds to buy the $50 ounce's not go through the black market and spend 200

  7. The thing is that there will be competition. One company could charge $250 for an ounce but others would make theirs cheaper, thus driving the price down. Weed is cheap to produce and it will be even cheaper when it can be grown on massive fields. You can buy a quarter pound of rolling tobacco for like $30. Weed isn't that much harder to produce. The reason it costs so much now is because it can only be made on a small scale and has to be shipped in spare tire wells rather than by the truck load. We also pay for the risk of all the people involved in the distribution chain. When it's legal, there is no way the price before tax will be even close to the price it is now. A 10% tax wouldn't be that much.
  8. ^^This, when do you ever hear of a 12 pack being sold with a 50% markup to under aged people :rolleyes:
  9. the whole idea is it will be like alcohol...
    30 pack=half
    12 pack=eighth
    6 pack = half eighth
    big cans= grams

  10. Ten percent sales tax on legal cannabis sounds great to me! ;)

    edit: As a matter of fact, @ $450 an oz of dank in my state, 15 or even 20 percent sales tax is fine with me.
  11. any tax is still gonna be cheaper then these bitch ass black market prices
  12. Hey there! I been meaning to talk to you. I can't right now, though. I'll pm you soon. I don't even know why I'm typing this other than I'm a bit spacy right now, man. haha...I guess that's partly why I can't pm you right now. I can't complete a thought. OMG, if I don't end this post now, it'll go on forever until my buzz ends. I've already had to fix seven typos. I'm stopping now. Make that eight typos.
  13. once prop 19 passes why not just grow for free in your yard?
  14. #14 VT_killah, Oct 9, 2010
    Last edited by a moderator: Oct 9, 2010
    Someone doesn't understand how the free market works. I highly doubt the government would impose a price floor on the price of an ounce :rolleyes:. Even if they did have a price floor it would be nowhere near black market prices, it'd probably be like $20.

    As someone else said above me, competition would drive the price down drastically. No highschoolers would be paying 400%+ more money than it is legally, as they would obviously know the legal prices. How often do you hear of highschoolers paying $400 for a keg?
  15. VOTE YES ON PROP19:wave::smoke:
  16. Damn, I love it when crap like this happens! I once made a a text message so long it sent in 10 messages. Needless to say my friend was laughing at me!

    OT: Yeah, as many other people stated. The 10% tax on any legal weed will be far less than any blackmarket price.
  17. #17 DankSeeker, Oct 9, 2010
    Last edited by a moderator: Oct 9, 2010
    If you don't like the prices and taxes after it's legal, grow it!!!
    A study done by someone like Rand, predicted that the price would drop to $50/oz to the consumer before taxes and, although there may some counties that will attempt to overtax when it is first legalized, eventually it will have to be reasonable otherwise people will either get it from another county, grow it, or get it from a friend growing it.
    There will still be a black market if there's any real profit to be made by avoiding the legal venues to sell, but I don't believe the profit margin will support a drug cartel.
    Prop.19 may not be without it's flaws, but the entire point is this will finally make it LEGAL for the common adult to legally possess, buy and grow marijuana in California.
    It's a step in the right direction.
    Other states are going to follow suit and the momentum could remove it from it's schedule1 classification within a few years.
  18. 10% is nothing, really... besides -- the price will drop DRAMATICALLY once commercial growers come into play... The laws of supply and demand will prevail here, once and for all...

    It's a plant for crying out loud... granted, there will always be Dom Perignon and Budweiser, but come on...it's a plant.


  19. I don't know where this 10% figure is coming from, but if I'm not mistaken I thought there was a tax in the legistlature that sets a 50 dollar per ounce tax.

    So if there is a 10% tax it will be on top of the 50 dollar / ounce tax.
  20. The $50 tax was on the legislative bill that stayed in committee last session and will be put in again next session.,not the initiative. All taxes are up to the municipalities
    to set.

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