SACRAMENTO, Calif — There’s a push from California lawmakers to reduce taxes on legal cannabis shops because they can be expensive to operate, lawmakers and industry experts say it’s also driving illegal sales.
Marijuana became legal for recreational use and some sales in California in 2016.
Without an investor backing Maisha Bahati, she said it would cost hundreds of thousands of dollars to start her own dispensary. She applied to the city of Sacramento's Cannabis Opportunity Reinvestment and Equity Program that's meant to help get minorities into the industry.
“There's less than 3% of black women in cannabis," she said. "So there are more of us that are needed in this industry, and I hope that I inspire those."
Now that she’s operational, the costs are not getting easier. She said she pays at least 35% in taxes.
“The taxes in California are insane for cannabis. Everything is taxed. Everything is overpriced. I feel like it does open the door for the illegal market to still thrive," Bahati said.
It's why the prices found in legal shops are often more expensive than what can be purchased on the illicit market.
"In order for us to be successful and be able to have a foundation in this industry, we have to be able to survive. And taxes right now, to me, is the biggest issue that the cannabis industry is facing,” Bahati said.
There are several bills in the California legislature aimed at reducing those taxes.
“There's a bill that grants a tax holiday for the cultivation tax," Senator Scott Weiner said. "My bill grants tax credits to cannabis retailers covering most of their state tax obligations for a few years to give them relief.”
He said for this tax relief to come from him should speak volumes.
“I say this as a liberal Democrat: We need to support this industry, so it doesn't collapse," He said.
Republican Assemblymember Tom Lackey said he is 100% on board with anything that helps reduce the illegal and dangerous illicit market.
"It will reduce the burden of cost, which will reduce their obligation to have such high prices in comparison to the illicit market pricing," Lackey said.
Lackey also supports one of Senator Scott Wiener's other bills that passed through a committee on 4/20 that would ban cities from prohibiting the sale of medical marijuana. Wiener said 2/3 of the state currently does not allow any form of marijuana.
"But I do think that local control is also, still there's got to be a balance with local control," Lackey said.