High Marijuana Taxes Drives up the Prices

New states adding marijuana legalization to their economic systems and start to profit heavily from their taxation. Washington State, as well as California, are the states where the heavy taxation of marijuana could lead the customers to other ways where to purchase marijuana-related products. Recreational marijuana in California is and will continue to be taxed on both state and local level contributing to higher marijuana prices. More than fifteen percent excise tax, as well as cultivation taxes, are applicable. Other forms of taxation include levy sales tax and a business tax which could be somewhere between one to twenty percent of the purchase. This additional business tax has been approved by the governments in over 60 California cities and counties. This heavy taxation contributes to the fact that many recreational users shift back to their “street” sources of marijuana where the price is significantly lower than in the legally licensed dispensaries. The State of Colorado, Washington as well as Oregon are aware of this fact and are trying to push to lower the taxes and keep businesses competitive. In the State of California, the process is a bit more complicated. Every municipality decides on their own if they want to allow marijuana businesses and what would be an appropriate form of taxation. Some counties are taking advantage of this trend and create jobs as well as offering county’s land for growing and harvesting marijuana.

The Marijuana Price Tag

Every State starts with a high marijuana sales shortly after the legalization. This process eventually slows down over the time and only well-established growers will survive the first wave of excitement from legalization. Another problem arises with the delays of regulations in many counties where officials are keeping marijuana businesses waiting without final decisions about how the businesses will be regulated and what taxes will apply. Nevertheless, the prices of every commodity are driven by the supply and demand and marijuana business isn’t very different from other profit-driven businesses. Lower supply heavily regulated by the government will reflect on the higher price and higher demand. Once the regulations ease, the price of the marijuana will go down and will become more available. The black market for marijuana has been traditionally a sellers-market. The seller holds the power over the price because the demand is too high. The situation is getting much better but under current regulation, the in-state grown marijuana must stay and sell in the same state or jurisdiction.

Ways to Save Money

Recreational or medical cannabis users don’t have to rely on the commercial supply of the drug. One example is the Washington D.C. where sales are prohibited but growing marijuana for a personal use is allowed inside the District of Columbia. The high prices of cannabis could be avoided by comparing and shopping around for a good deal. One way is to order from somewhere like Eaze, where you can use a promo code to save on your first delivery. The market in California became very competitive and created a business environment where buyers became more aware of their options to choose where to buy their cannabis products. With a brick and mortar shops, there are also coupon codes for delivery services like that offered by California based Kushfly. It’s up to the customer to decide where to purchase a quality product and use the newly created competition in the cannabis market to spend money more wisely.

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