MICHAEL R. BLOOD
LOS ANGELES (AP) — California is increasing business tax rates on legal marijuana, a move that stunned struggling companies that have been pleading with the state to do just the opposite.
Hefty marijuana taxes that can approach 50 percent in some communities have been blamed for pushing shoppers into California's tax-free illegal market, which is thriving. Industry analysts estimate that $3 are spent in the illegal market for every $1 in the legal one.
The California Cannabis Industry Association said in a statement that its members are "stunned and outraged."
The group said the higher taxes that will take effect Jan. 1 will make it even worse for a legal industry struggling under the weight of heavy regulation and fees, local bans on pot sales and