San Francisco Gate
First, cannabis farms started going out of business, as weak retail sales and plummeting wholesale prices turned historic farms unprofitable. Then, the cash crunch came for distributors, which are the legally required middlemen between producers and retailers. With retailers running out of money, they stopped paying their bills to distributors. Producers and distributors kept sending legal pot to stores in the hopes they’d get paid eventually, but that only created a massive debt bubble. Now it’s bursting, bringing companies down across the state. Most famously, Herbl, once the largest pot distributor in California, collapsed last June.
The economic crunch has now come for retailers, with hundreds of stores across the state on the verge of failure. The bankruptcy declaration of MedMen, a cannabis retail chain that was valued at more than a billion dollars when California’s legal market first launched, in April served as a warning that things really are dire. The California Department of Tax and Fee Administration said last month that 15% of retailers and distributors are in default on their taxes, which analysts say is close to a death sentence for those businesses as they face a 50% penalty if they miss a single tax payment.
Finally, the problem has worked its way to the government: An April report found the state was owed approximately $732 million in overdue cannabis taxes, money that the government will likely never see because 72% of those companies have gone out of business. Turns out the regulatory maze that led to sky-high licensing fees and tax burdens may not have actually been the way for communities to make money. Local governments from Sonoma County to Monterey County are finding that cannabis tax revenue cannot cover the costs of regulating the industry. More
Insert Seinfeld “That’s a shame” meme…
A friend worked for one of the ’boutique’ pot companies for a while. She said they all acted like the money was just going to roll in – well-funded, without profits (but they are for sure going to be richhhh!!!) No business sense.
Pot.
Tell your grand kids.
It’s over-rated, stupid, a waste of money and makes you stupid.
Have a glass of milk instead and be strong. 🤣
(I’m back from vacation on the Pacific Ocean. O.M.G!
As the article hinted, governments became greedy. I doubt marijuana sales have gone down in California as such, but legal sales have so many taxes attached to them that illegal sales are a bargain in comparison. As I recall, Colorado found that out a few years ago.
Too damned bad for all the potheads, pot should’ve never been legalized in the first place. I could see decriminalizing it, now illegal dope back in style, probably cheaper and the states like California that legalized it aren’t getting tax money from it anymore, the cartels are. California killed their golden goose by legalizing it and I don’t feel sorry for all the stoner dumbasses.
Florida residents need to take note. The pot industry is trying to legalize mj in the 2024 elections via Florida Amendment 3.
Money$$$ making and a drug
that makes you lazy & stupid
don’t go together……
Money$$$ making and a drug
that makes you lazy & stupid
DO go together…… Have you considered greedy California democRATz???
Imagine thinking that idiot potheads were gonna make you rich? Most of them are scrounger fucks stealing from grandma’s purse.
that “just passing thru” is not me.hey, get a new name you thief.lol.
Will the real “Just passn thru” please stand up!
(It wasn’t me. But I’m just passn thru this old world…)
In a lot of these cities, there has to be an “equity partner” – that is, a miniority person previously convicted of a pot offense. AND: that person gets to own 51% of the business, which is never transferable to anyone other than another “equity partner”. Any wonder the illegal pot dealers are kicking ass over legal ones?
yea General, I’m the real one,and yes this world is not my real home either. I have a better home in glory waiting for me, as I pray you do also. Have a great day…
Eternal bliss to just passn thru. Hey, a guy can hope.
So the gist of this article is that the California government has screwed up selling drugs for a profit? Color me surprised.
They, being the government, never understood the market. It’d be safer for the potheads if the state put its effort into making sure the pot wasn’t laced with other harmful chemicals and that the plants were grown responsibly, but since when did California actually care about what’s best for its citizens.
A larger lesson can be drawn from the experience! Government can/will destroy whatever it touches!
Because of the taxes and licensing/testing fees, California priced themselves out of the market. Legal weed cost twice as much as black market weed, and with the Emerald Triangle just up north there’s no shortage of product. Government has no idea how to run a business; if you have deep pockets you undercut the competition until you run them out of business, then charge whatever you want – I’ve seen the supermarket chains do it for years.
Government couldn’t run a whorehouse and turn a profit.
And don’t forget boys and girls. The gov most likely has already spent the money for the next 20 years on a projected revenue.
Cannibis shops are popping up like Dollar General stores in my part of Michigan.
WAHHHH WAHHHHH
(sad panda)
Nice side effect… All the growers have moved closer to town. My 80+ year old Dad isn’t having to patrol our ranch for squat grows. The fish hooks strung at eye level in the forests are not so much a threat these days. But having grown up with it ever present, I don’t know that I will ever be able to let my guard down and just hike thru the forest in peace like I did as a child.
I hate growers. Just raw !!?!@#$! hate them…
KR