LA is literally the worst place to buy legal weed thanks to exorbitant sales taxes

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California may have the largest legal cannabis market in the entire US, but the state’s cannabis taxes are so damn high that many customers are still buying their weed on the black market. And to top it all, the state’s tax system is so confusing that even experienced budget tenders find it difficult to explain where the customers’ money actually goes.

The Golden State taxes every single stage of cannabis production from seed to sale. Licensed growers are charged three different taxes: $ 9.65 per ounce on dried flowers, $ 2.87 per ounce on potted leaves, and $ 1.35 per ounce of fresh plant material. On the retail side, all pharmacies must levy a cannabis consumption tax of 15 percent plus the usual 7.25 percent state sales tax. Additionally, individual cities, counties, and municipalities can add as much additional taxes as they want.

These variable local taxes cause the price of weed to fluctuate widely across the state. Anyone who purchases $ 100 worth of weed from a legal Los Angeles pharmacy will end up spending $ 138.52 after all state and local taxes are collected. Legal sales in Hollywood, Oakland, and San Jose are also charged with combined cannabis taxes of 38 percent or more.

Overall tax rates in midsize cities like Sacramento and San Diego tend to hover between 33 and 34 percent. However, cannabis customers can save some money by visiting pharmacies in smaller towns. A hundred dollars pre-tax weed is just $ 127 in the aptly named town of Weed, and tax rates are even slightly lower in Yolo and Alameda counties.

In a recent interview with KCRW, Leafly Editor-in-Chief David Downs discussed the specifics of the Golden State’s confusing cannabis tax system. “Just for comparison, Oakland’s cannabis taxes are 417 times higher than Oakland’s gun and ammunition taxes [businesses,]“Downs explained. “And in Los Angeles, marijuana taxes on corporations are 2,808 times higher than corporate taxes on cashing a check or a payday lender.”

These extreme taxes are one of the main reasons the state’s illegal cannabis market ranks three times as much as the legal industry. The high tax rates are also bad news for licensed pharmacies, many of whom struggle to make a profit after coughing up their own license fees and business taxes.

“This is especially true for small cannabis companies or minority-run cannabis companies that have no reserves [per se] or wealthy investors or a line of credit – even though the state has hundreds and hundreds of millions of dollars in tax revenue, “Downs told KCRW. “The actual amount a business owner has left at the end of the day is often zero or a negative amount.”

Last year California raised a staggering $ 1 billion in cannabis tax revenue. And while these extreme taxes discourage legal cannabis purchases and harm local cannabis companies, the state uses at least some of that money. Over the past three years, California has reinvested $ 532.8 million in weed taxes in public health, safety, and environmental programs. More than $ 140 million of this went to 11,000 low-income children in childcare and an additional $ 37.5 million to programs to support young people at risk.