High taxes on legal pot in California may boost black market, says Fitch - Sovereign Health Group
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11-03-17 Category: Marijuana

Imposing high taxes on legal pot in California may force consumers to move away from marijuana dispensaries and take to the black market, according to a report from Fitch Ratings. The credit rating agency said that both the local and state taxes on cannabis, which will come into effect in California on Jan. 1, 2018, may be as high as 45 percent in certain cases, only second to Washington D.C. that imposes a 50 percent tax on marijuana. “The existing black market for cannabis may prove a formidable competitor to legal markets if new taxes lead to higher prices than available from illicit sources,” says the report.

The Fitch report indicated that the states of Oregon, Colorado and Washington cut down tax rates since the decriminalization of marijuana to woo customers back to the legal pot market as a part of their business strategy. It outlines that legalization of marijuana would imply immensely high stakes for several parts of California, which include Trinity, Humboldt and Mendocino counties forming the Emerald Triangle in northern California.

Experts fear that many small-time cultivators in northern California, which has been a hub for marijuana plantations, would be eliminated by large-scale marijuana operations. At the moment, both the state and several municipalities have left businesses in an uncertain period of inactivity just weeks before the legalization by not releasing their regulations. In fact, cities like San Francisco admitted that even by Jan. 1, 2018, they may not have their regulations in place.

In the light of the current situation, the new California Bureau of Cannabis Control is striving hard to streamline regulations to begin issuing state licenses to cultivate, sell and transport marijuana in January 2018. These new rules would help rein in the marijuana black market.

More and more Californians are taking to marijuana

Last year California led the country with its enormous production of 13.5 million pounds of marijuana, exceeding the output of the rest of the states. After having produced five times more than its domestic consumption of 2.5 million pounds, authorities fear that the surplus may have made it to other states, where the drug is still awaiting decriminalization. According to the California Department of Public Health (CPDH), from 2013 to 2015, 70 percent of 11th graders reported it was fairly easy or very easy to get marijuana in the state. Further, in 2016, 9.5 percent of adult Californians aged 18 to 64 reportedly used cannabis or marijuana hash oil at least one day in the past 30 days.

Currently, federal law classifies marijuana as an illicit substance under the Controlled Substances Act, along with other drugs like LSD, lysergic acid, ecstasy, heroin and peyote as Schedule I drugs. Also, U.S. Attorney General Jeff Sessions has maintained his stand in favor of a stricter enforcement.

Breaking free from fetters of marijuana

Despite the popularity of marijuana in many circles, the U.S. Food and Drug Administration (FDA) has neither recognized nor approved its medicinal value due to insufficient clinical trials to establish the therapeutic benefits. The neurotoxin, delta-9-tetrahydrocannabinol (THC), is the main ingredient in marijuana that induces psychoactive changes in the body, leading to dependence and cravings in chronic users.

Sovereign Health is aware of the misery of individuals battling addiction to marijuana and other substances. Our personalized marijuana addiction treatment programs in California are tailored to individual needs in order to treat the person holistically. If you or a loved one is struggling to break free from addiction to marijuana, contact Sovereign Health of San Clemente, California, which offers a variety of customized residential therapies for all ages, including troubled teens battling with a substance use disorder. Our licensed clinicians use several approaches to resolving each underlying problem. For more information, call our 24/7 helpline or chat online with one of our representatives.

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