On stimulating fumes and to appease frustration.
Through Wolf Richter for LOUP STREET.
The state of California’s third-quarter cannabis tax revenue soared from a record 80% year-on-year, and from a record $ 136 million year-on-year, to $ 307 million, according to the California Department of Tax and Fee Administration. reported Monday afternoon. This does not include tax revenue collected by cities and counties. All three categories have increased: excise tax (+ 90%), culture tax (+ 80%), and sales tax (+ 66%).
This raised California’s cannabis taxes in the first nine months of 2020 to $ 778 million, and on track to surpass $ 1 billion for the entire year, a much-needed injection of moolah in these difficult times:
Cannabis has always been a popular product and business in California in a huge black market that persists today, but what we are seeing is the shift from black market weed to regulated and taxed legal weed, largely locally grown and sold to traders who pay rentunlike other retailers who have closed or stopped paying their rent.
California’s cannabis tax revenue had grown by about $ 60 million each quarter compared to the same quarter a year earlier, since legalization began in January 2018. This rate of growth was fairly stable through the fourth quarter. 2019.
Then in February 2020, Covid started running in California, and people started to respond. On February 26, San Francisco declared a state of emergency. By this time, the traffic had already stopped. On March 17, the five most populous counties in Bay Area began lockdown. And people, to alleviate their pain and their anxieties …
In the first quarter, cannabis tax revenue jumped $ 81 million year-on-year to $ 211 million. In the second quarter, stimulus money and additional unemployment benefits of $ 600 per week began, and cannabis tax revenues jumped from $ 103 million to $ 260 million. And in the third quarter, stock market gains were dodged in, and the state began paying out the extra $ 300 a week in unemployment benefits in Lump sum payments of $ 900, and cannabis tax revenues have exploded from $ 136 million to $ 307 million.
This graph shows the years increases in millions of dollars for each quarter. Notice how until 2019 the year-over-year increases were roughly flat at around $ 60 million, and then they jumped:
With a cannabis sales tax rate of 7.25% (6% state and 1.25% local mandatory) and $ 106 million in reported sales taxes, we can deduct that $ 1.46 billion of grass were retailed by regulated retailers during the quarter. For the year 2020, retail sales of legal cannabis will likely exceed $ 5 billion, and at that rate, will exceed $ 6 billion in 2021. This is starting to add up.
The regulations that followed California Proposition 64, approved by voters in November 2016, legalized the production, distribution, sale and use of recreational cannabis by adults as of January 2018. The regulations is complex. Three regulatory offices are in charge: the California Bureau of Cannabis Control; California Department of Food and Agriculture; and the California Department of Public Health. And things are not always clear and have led to legal entanglements, on which a judge has just ruled: the advertising of cannabis products and businesses on highway billboards.
Proposition 64 included a ban on billboards on highways advertising cannabis products and businesses. The California Bureau of Cannabis Control had interpreted the language to mean that there could be no cannabis billboards within 15 miles of the California border, but there was no problem elsewhere. Soon cannabis billboards started popping up everywhere, including along Highway 101 near San Louis Obispo, where a construction contractor with two children who used the highway frequently decided it was. was enough and continued.
A San Luis Obispo County Superior Court judge on Friday said in a ruling that the Bureau of Cannabis Control improperly authorized such cannabis billboards along California highways and that the office and its director “had overstepped their authority by promulgating the Advertising Placement Regulations “.
The ruling bans billboards along 4,315 miles of interstate highways and along national highways that cross state borders, according to one of the plaintiff’s attorneys, cited by the Los Angeles Times (State law allows cannabis advertisements on city streets, subject to local ordinances, but not within 1,000 feet of daycares, K-12 schools, or playgrounds). The office said it was “still reviewing the decision” and had not decided whether to appeal. No one said it would be easy to take the huge cannabis business off the black market and integrate it into legal farming and trading. But it seems to have been worth the effort.
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