Cannabis users were ecstatic when voters legalized marijuana in 2016. But reform came with a price — quite literally.
Thanks to taxation, legal weed is expensive in the Golden State. There’s a statewide excise tax of 15% and a state retail tax of 7.25%. Then, municipalities can tack on as much as 15% more in local cannabis business taxes.
Recently, a number of cities have realized that lower tax rates can keep them more competitive. But there are still plenty of localities slapping high taxes on cannabis these days.
Leafly examined 20 of the largest cities in California and more than 20 smaller towns to determine who has the highest and lowest weed taxes. They found that larger metros were the biggest gougers of all.
The worst metros for cannabis taxes, according to Leafly, are Los Angeles, Oakland, and San Jose. All of them collect 10% of gross receipts from cannabis businesses. San Francisco and Sacramento rank somewhere in the middle with a 5% weed tax.
In general, less progressive localities have a friendlier tax environment for cannabis businesses. Or at least they do if they decide to allow cannabis businesses at all. Fresno’s rate is just 4%. Yolo County’s is 5%. The City of Weed charges just 3%.
But the best rate of all can be found in unincorporated Alameda County, which “never got around to passing a local cannabis business tax,” Leafly notes. A budtender at We Are Hemp, one of the few cannabis retailers in the area, told Leafly: “We definitely get people here from all over trying to beat the tax man.”
Who can blame them?