How the legalization of marijuana will affect California’s tax revenue.
While you might assume that the legalization of marijuana would have clear tax benefits for the state of California, the reality is a little more complicated. Because legal cannabis markets take time to establish, the tax revenue generated so far has not been particularly impressive. But this doesn’t mean that marijuana legalization will be a bust. Here’s what you need to know about how the legalization of marijuana will affect California’s tax revenue.
Numbers show that the state of California raised the second-least amount of revenue from cannabis taxes among the states that have legal markets. This poor showing can be attributed to several factors. First, the low revenue is a result of the market’s youth. With the market launching in January 2018, it is the second youngest market in the nation. The lackluster performance can also be traced back to California’s complicated legal policies that make it difficult to open and operate a marijuana-based business.
However, California’s outlook is bright. Revenue is up 19% from last quarter, and about 80% higher than it was at this time last year. Experts expect to see cannabis tax revenue increase steadily as the state continues to work out the kinks in their system. For instance, the numbers will go up as California standardizes the laws governing marijuana businesses, and as prices start to meet or drop below black market prices.
As the largest state to legalize marijuana, cannabis critics and proponents alike continue to watch the growth of California’s market. While only time will tell, experts remain confident that the legalization of marijuana will affect California’s tax revenue positively. Want to stay in the loop with California’s latest cannabis news? If so, then contact the experts at California Commercial Realty Advisors, Inc. today.