After nearly two years since recreational marijuana became legalized in California, plans to rake in the dough have seemingly gone up in smoke.
On Nov. 9, 2016, California voters passed the Control, Regulate and Tax Adult Use of Marijuana Act, which received 57 percent voter approval. Proposition 64 currently allows adults aged 21 years or older to possess and use marijuana for recreational purposes.
The measure also created two new taxes, one levied on cultivation and the other on retail price. While the new measure made cannabis legal for adults to purchase and consume, it also along the way has opened up a door to an array of pungent, unprecedented issues.
Projected by former Gov. Jerry Brown to bring in $643 million in just excise and cultivation taxes in 2018 alone, the state only amounted a mere $345 million in taxes for the year.
State officials have continuously put the blame on exorbitant taxes that have been placed on the legal pot industry for lack of revenue.
Who’s to say they aren’t wrong?
When Prop. 64 came into fruition, myself and basically everyone else with enough knowledge of how large-scale business operates collectively cringed.
With a prior sales tax of 15 percent, dispensaries were being rolled up by the black market quicker than a running joint.
According to New Frontier Data, a firm that tracks cannabis sales and trends, close to 80 percent of marijuana sold in California stems from the black market. Research also found the market was worth an estimated $3.7 billion last year, nearly four times that of the legal market.
In response to the failing market, the state Treasurer Fiona Ma and Assembly members Rob Bonta (D-Alameda), Reggie Jones-Sawyer (D-South Los Angeles) and Tom Lackey (R-Glendale) introduced Assembly Bill 286, known as the Temporary Cannabis Tax Reduction bill. If passed, the state’s excise tax on cannabis would be cut from 15 to 11 percent.
As the federal government still classifies marijuana as a “Schedule 1” drug (heroin resides in this same category), pot businesses are legally unable to dispense their earnings into the banking system. This forces legal marijuana businesses to be stuck working with cash, ultimately feeding into an already huge illegal market problem.
Legal weed hasn’t quite meant clean weed either.
Another issue in the lack of cannabis tax revenue generated last year derives from the same reason people normally try to avoid street pharmaceuticals — they are tainted.
Much of California’s cannabis, including the “medicinal” products are riddled with unknown chemicals, unannounced to consumers.
According to a random study conducted by the NBC4 I-Team in 2017, seven of 24 samples purchased around Los Angeles-based dispensaries tested positive for pesticides well outside of the state regulation limit. The same investigation a year later revealed nearly 93 percent of random samples bought in legal shops in Los Angeles contained an unruly amount of pesticides.
Some of the pesticides discovered include benzene, pyrethrin and myclobutanil. When heated past 340 degrees Fahrenheit when smoking or vaping, myclobutanil converts into a colorless and extremely poisonous gas hydrogen cyanide — so dangerous that the gas has been used previously in chemical warfare.
Last year, Steep Hill Labs, a Berkeley-based testing facility, detected pesticides in 84 percent of samples.
When growing cannabis on a large scale became a free for all opportunity to get rich quick, ethics and patients' health took a major back burner for growers. Black market cannabis is much easier to grow because “farmers” do not have to worry about powdery mildew outbreaks, mites and mold when they can spray pesticides.
Illegal growers normally faced with state pesticide testing regulations can make their money elsewhere expediting dirty product for nearly triple the price to the 17 states that haven’t legalized any form of recreational or medical marijuana.
Interestingly enough, with millions of Californians going out of their way to live a healthy organic lifestyle, the same people are the ones continually purchasing dirty pot.
Organic cannabis is easier said than done.