Not so many people are happy with California’s weed tax system. The state currently imposed two taxes on cannabis, one of which is about to increase on January 1. Critics of the system say the high taxes serve the black market better than its legit counterpart.
Amid the controversy, the state is considering a change to the system that would tax cannabis based on its THC content.
The proposal comes from a report from the California Legislative Analyst’s Office. The office suggests that the state drop its current cultivation tax, based on weight after harvesting, and instead impose a new tax based on potency, as reported by the Sacramento Bee.
The report proposes imposing a tax of $0.006 and $0.009 per milligram of THC. The move would essentially set up different economic paradigms for cultivators who focus on THC-heavy and CBD-heavy crops.
It could also potentially incentivize CBD production while discouraging THC production and pushing it further into the black market.
If enacted, California would become the first U.S. state to impose a THC tax. Canada currently imposes a tax on THC on products such as concentrates and edibles.
The proposal has both supporters and detractors in the cannabis community.
“Given this, the state’s recent decision to raise taxes for legal cannabis is a clear misstep that will hurt consumer safety,” the group Legal Cannabis for Consumer Safety said in a statement.
“The state and governor must take action now to protect consumers by lowering taxes on safe, tested products.”
If lawmakers don’t go for the “high” tax, the report also suggests a “tiered ad valorem” excise tax based on a product’s sales price.
Photo via Flickr/Victor Sassen