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xchrom

(108,903 posts)
Sat Jun 21, 2014, 07:56 AM Jun 2014

Legal Pot Estimate Cut as 44% Washington Tax Curbs Demand

http://www.bloomberg.com/news/2014-06-20/legal-pot-estimate-cut-as-44-washington-tax-curbs-demand.html

Washington is poised to be as much of a disappointment as Colorado at filling its coffers from sales of legalized marijuana as buyers in the Pacific state balk at paying an effective sin tax rate of about 44 percent.

Revenue in Washington from voter-approved recreational pot sales, which start next month, is projected to fall 69 percent short of initial estimates as the state issues as few as 10 of 334 recreational licenses and the lower cost of medical marijuana undercuts demand, as it did in Colorado.

State officials across the U.S. have been watching to see whether legalizing marijuana will help balance their budgets as the economy rebounds from the worst financial crisis since the Great Depression. Alaska voters will consider legalization in the November election, and an effort is under way to place a similar measure on the ballot in Oregon. Two years from now, legal-pot advocates plan campaigns in Arizona, California, Nevada, Massachusetts, Maine and Montana.

“The potential windfall is limited,” said Mark Kleiman, a public policy professor at the University of California, Los Angeles, who helped devise Washington’s marijuana policy as a consultant to the state. “In the first couple of months, I think the prices will be high. The tax collections will be small because the volume will be small.”
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Legal Pot Estimate Cut as 44% Washington Tax Curbs Demand (Original Post) xchrom Jun 2014 OP
Say what!? How stupid. Obviously the brainchild of those against legalization. freeplessinseattle Jun 2014 #1
I've seen the sentiment here on DU of ohheckyeah Jun 2014 #2
I was ok with the 29% tax that was supposed to be the final choice, but come on, 44%!!?? freeplessinseattle Jun 2014 #23
That is a ridiculous amount, freeplessinseattle. Uncle Joe Jun 2014 #24
Seems to be the plan, doesn't it?:) eom freeplessinseattle Jun 2014 #25
We'll live and learn from Washington and Colorado's experiences. Comrade Grumpy Jun 2014 #3
the prices themselves are outrageous fizzgig Jun 2014 #5
California had a boom and bust thing happen when the shops proliferated beyond the legal supply. LeftyMom Jun 2014 #7
60 bucks for an ounce is very cheap Timez Squarez Jun 2014 #11
In 69 I was paying $15 for an oz of Acapulco Gold in Haight Ashbury. L0oniX Jun 2014 #14
yes, for an eighth fizzgig Jun 2014 #16
I was ready to say something too. LLD Jun 2014 #22
Colorado seems to be doing okay the last time I checked, legalization of cannabis has also created Uncle Joe Jun 2014 #4
Excessive taxation just creates a bigger black market. nt LittleBlue Jun 2014 #6
Evidenced, of course, by the huge tobacco cartels. OilemFirchen Jun 2014 #9
You're not aware of the cigarette black market, then? LittleBlue Jun 2014 #12
Meh. OilemFirchen Jun 2014 #13
Here is the problem with taxing it at stupid rates. dilby Jun 2014 #8
Exactly right MaggieD Jun 2014 #19
Colorado wins! Timez Squarez Jun 2014 #10
How much is an ounce of pot Aerows Jun 2014 #15
A very *tiny* piece would already make you higher than God... Timez Squarez Jun 2014 #17
Washington has no income tax MaggieD Jun 2014 #18
+1 lumberjack_jeff Jun 2014 #20
Do you remember when they subpoenaed... MaggieD Jun 2014 #21

freeplessinseattle

(3,508 posts)
1. Say what!? How stupid. Obviously the brainchild of those against legalization.
Sat Jun 21, 2014, 05:17 PM
Jun 2014

So let those numbskulls pay higher property taxes then, and get reamed some other way to pay for Big Bertha.

freeplessinseattle

(3,508 posts)
23. I was ok with the 29% tax that was supposed to be the final choice, but come on, 44%!!??
Sun Jun 22, 2014, 03:37 AM
Jun 2014

What other products or services are taxed that much?

 

Comrade Grumpy

(13,184 posts)
3. We'll live and learn from Washington and Colorado's experiences.
Sat Jun 21, 2014, 05:30 PM
Jun 2014

If taxes are too high, they won't be able to end black markets.

There must be an optimum tax price-point. I'm sure some economist could come up with a chart.

The Washington initiative is too tight, anyway. Live and learn.

fizzgig

(24,146 posts)
5. the prices themselves are outrageous
Sat Jun 21, 2014, 06:10 PM
Jun 2014

60 bucks for an ounce at the shop that just opened in my (colorado) city.

LeftyMom

(49,212 posts)
7. California had a boom and bust thing happen when the shops proliferated beyond the legal supply.
Sat Jun 21, 2014, 06:24 PM
Jun 2014

It started to settle back down and then there was a price crash when the feds started closing many of the shops. I wouldn't expect the prices to be entirely stable until the legal ground is firmer, right now a federal election (or just a whim) could really change the legal landscape and thus the costs of operating a dispensary.

As a side note, reading serious news articles in the regular paper about the plight of the pot farmer was kind of surreal.

 

Timez Squarez

(262 posts)
11. 60 bucks for an ounce is very cheap
Sat Jun 21, 2014, 06:57 PM
Jun 2014

Are you sure it's not for a 1/4? That's what the regular prices are.

Colorado MMJ market: (Note: I have never stepped into a legal marijuana store and don't plan to anytime soon)

1/8: $25-30

1/4: $50-60

1/2: $80-100

1 ounce: $150-200

2 ounces: $225-250

fizzgig

(24,146 posts)
16. yes, for an eighth
Sat Jun 21, 2014, 09:20 PM
Jun 2014

and that doesn't include taxes. mmj prices are much lower.

i can get a quarter for 65.

Uncle Joe

(58,354 posts)
4. Colorado seems to be doing okay the last time I checked, legalization of cannabis has also created
Sat Jun 21, 2014, 05:35 PM
Jun 2014

jobs in other sectors of the economy.



http://www.inc.com/will-yakowicz/legal-marijuana-gives-colorado-businesses-a-lift.html

According to the latest data from the Colorado Department of Revenue, the state's legal recreational marijuana industry sold more than $22 million worth of cannabis in April. Since legalization, weed sales have generated $11 million in sales and excise taxes, a figure expected to increase to $30 million by the end of the year.


(snip)

Demand for Johnson's staffing services has gotten a bump recently, in part thanks to demand related to the marijuana industry. "In the first quarter of the year, which is typically a low season for us, we couldn't get enough electricians out wiring circuits and electricity in places that used to be empty warehouses and now are grow houses," he says. "They are literally everywhere." Ironists may appreciate how Johnson sends only drug-free individuals to build and outfit marijuana-growing facilities, but the demand for more workers is serious business. "If we had 100 more electricians, we'd have them on a job by Tuesday," Johnson adds.

There is also an influx of workers to the state, says David Bacon, the CEO for Better With Bacon, a recruiting firm for startups and technology companies. He's found legalization has made Colorado a more desirable destination for the famously different-drummer types attracted by the businesses he serves. "The fact that companies based here are in a state that recognizes a certain freedom for recreational use has strengthened the appeal for job applicants," he says. "I'd say there's up to a 20 percent increase in people contacting us for a job in Colorado."

Meanwhile, entire new categories of businesses have sprung up around legal weed. One of Bacon's clients is a software company that has built a seed-to-sale tracking system for marijuana growers and dispensaries. Colorado law mandates that marijuana must be tracked until it's sold--so a plant is catalogued starting when it's cloned, through when it's chopped up and dried (or turned into oil or pot-infused foodstuffs known as edibles), distributed to stores, and placed on shelves. "Whenever you have a federal, or in our case a state, law or mandate, there are new regulations and compliances that come into effect," Bacon says. "You can't just go grow pot and sell it." And with such regulation, he says, also comes opportunity.

Run on real estate

Ethan Chumley, CEO of Denver-based national steel building construction company Armstrong Steel, says revenue at his Denver business increased 35 percent in the past few months, in part from customers requiring buildings to grow marijuana. "It's been such an uptick that it caused me to consider offering turnkey construction for growers--ventilation, lighting, and all the other things they need," he says, noting that the rise in such construction projects has created a significant number of jobs.



There is much more on the link.

Thanks for the thread, xchrom

OilemFirchen

(7,143 posts)
9. Evidenced, of course, by the huge tobacco cartels.
Sat Jun 21, 2014, 06:53 PM
Jun 2014


As a smoker, I look forward to the new BATMF.

Enjoy the ride.

dilby

(2,273 posts)
8. Here is the problem with taxing it at stupid rates.
Sat Jun 21, 2014, 06:25 PM
Jun 2014

Marijuana is legal so people don't care who they buy it from, they will continue to buy it from Mexican Cartels on the black market because it's cheaper than walking into a store to buy it and pay ridiculous fees. All Washington is doing is making the Cartels a ton of money, when they could be making citizens of Washington a lot of money and getting a nice kickback in a reasonable tax to the state.

And the tax is not curbing demand, it's curbing the demand of paying a tax, people are still buying weed like they always were. They are just buying it on the black market.

 

Timez Squarez

(262 posts)
10. Colorado wins!
Sat Jun 21, 2014, 06:55 PM
Jun 2014

25% tax on pot is more than reasonable. Washington fails to realize that and black market pot continues to operate in Washington.

Colorado does not have that problem, as 25% tax on legal pot is a reasonable number. Since we're making hands over fist on these legal pot, there's a very good chance it'll be lowered to about 15% tax and still make hands over fist.

As an MMJ red card holder, I do not have to pay those legal marijuana taxes. And I do have my reasons to be a red card holder.

 

Aerows

(39,961 posts)
15. How much is an ounce of pot
Sat Jun 21, 2014, 09:00 PM
Jun 2014

compared to a few drinks of good booze? I realize that not everyone can make booze and people that can grow pot can grow it, but compared to, say, a fifth of quality liquor how does the price stack up towards getting high?

I don't smoke, so I don't know - I just thought it would be a cost margin thing. Do you need a significant amount of pot to equal booze?

 

Timez Squarez

(262 posts)
17. A very *tiny* piece would already make you higher than God...
Sat Jun 21, 2014, 09:47 PM
Jun 2014

if you have not experienced pot before.....

Actual size: ( )

I have a high tolerance, so I need to smoke a lot more to get the high, but since I started smoking once a day, my tolerance went down...


 

MaggieD

(7,393 posts)
18. Washington has no income tax
Sat Jun 21, 2014, 09:54 PM
Jun 2014

And they give give huge tax credits and exceptions to big business. Therefore our sin taxes are always outrageous. Very regressive tax structure.

This will ensure pot sales stay underground. That's for sure.

 

MaggieD

(7,393 posts)
21. Do you remember when they subpoenaed...
Sun Jun 22, 2014, 12:12 AM
Jun 2014

All the records of online cigarette sellers and hit up all the buyers from inside WA state for thousands in unpaid cigarette taxes? I do. Some people owed over $10 grand in taxes.

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