Pot Shock: Cannabis Revenue Falls Far Below Expectations

Since the beginning I have been saying that the legalization of marijuana in California is NOT about the weed bought in a store—but allowing the drug cartels and street dealers to sell more of the product.  No one is claiming that the use of marijuana is down—in fact they say it is up.  Yet, tax revenues are minimal compared to the actual use.  Why, because legal marijuana can not be said to be different from illegal marijuana—except legal marijuana a costs roughly DOUBLE what your dealer sells it for.

“The underperformance of California’s legal marijuana market has ripped a hole in the state budget, according to documents released Thursday. Gov. Gavin Newsom’s administration now says it expects $223 million less in cannabis tax revenue through June 2020 compared to projections from just four months ago.

Newsom is blaming local governments that have been resistant to commercial pot in their communities.

“We knew [some counties and cities] would be stubborn in providing access and providing retail locations and that would take even longer than some other states, and that’s exactly what’s happening,” the governor said.

Simi Valley makes it difficult to legally buy pot, no one is doing without.  In fact they can by more by using the street dealer than a government authorized shop!

Pot Shock: Cannabis Revenue Falls Far Below Expectations

California County News,   05/12/2019  

The underperformance of California’s legal marijuana market has ripped a hole in the state budget, according to documents released Thursday. Gov. Gavin Newsom’s administration now says it expects $223 million less in cannabis tax revenue through June 2020 compared to projections from just four months ago.

Newsom is blaming local governments that have been resistant to commercial pot in their communities.

“We knew [some counties and cities] would be stubborn in providing access and providing retail locations and that would take even longer than some other states, and that’s exactly what’s happening,” the governor said.

But consumers also know they can avoid cannabis taxes by continuing to rely on black market sources. The state too has been sluggish in the licensing process.

Not long ago, California was projecting $1 billion in revenue from the legal market. State excise taxes are expected to produce $288 million this year and $359 million next year, which is $67 million and $156 million less than expected.

Local prohibitions on marijuana and declining revenue are among the main impetuses behind new state rules allowing cannabis deliveries even in jurisdictions in which they aren’t welcome. That policy has sparked a legal challenge from cities and counties against the state.

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.