State and local taxes currently imposed upon retail cannabis sales can total in upwards of 40 percent. This excessive taxation places an undue financial burden, particularly on patients, many of whom are now unable to consistently afford their medicine.
Further, these tax rates make it exceedingly difficult for retail providers to compete with those in the underground market. One of the primary goals of Proposition 64 was to bring the black market above ground and to make this market transparent. In order to do so, it is necessary to reduce existing tax rates. Otherwise, compliant businesses are at a significant disadvantage due to their inability to compete with those who do not pay similar taxes.
NORML has long maintained that taxation on commercial activities should not be so excessive that it incentivizes consumers to obtain cannabis from the black or grey market, and that taxes upon medical patients should be nominal at most.