The Cost of Prop64

A look at how Prop64 has affected the Central Coast of California as of June 30th, 2019.

In the wake of Prop 64 going into effect across the state of California, starting in January of 2018, the residents of California have seen prices rise while the number of available options has declined. The central coast of California is a conservative area that has most often been slanted against cannabis farms and businesses. Since Prop 64 reached the central coast the number of medical delivery services, providing ease of access to many bedridden and home-locked patients, has dropped by roughly 85%.1 With Santa Maria serving as an example where in July of 2018 there were nearly 30 different medical delivery services that covered the city and surrounding area, and now patients have approximately 5 to choose from (really 4 if you don’t count the state wide service of Budee). Residents of California who live in the more remote areas are having to rely on these types of services that have been rapidly closing up shop due to the high operating costs levied on them by State legislation. 

 

Retail locations have not been welcomed by every community, and with the number of delivery services declining, patients of California’s medical cannabis program may be hard pressed to get the relief they need. The towns of Lompoc and Pismo Beach have both had 2 recreational dispensaries open since January 2018, with a third slated to open in Lompoc on the Friday after this writing. These dispensaries offer a variety of products that are not local to the area, but at a higher cost than comparable products from the local delivery services. 

 

In Los Angeles the prices pre tax have stayed steady between $10 - $15 a gram for “top shelf” cannabis, and depending on whether the purchase is medical or recreational the amount of tax paid varies. San Francisco, known to have sold the first recreationally legal eighth of cannabis on January 1st 2018 for $60 including taxes, has seen prices rise since recreational legalization. The price of a gram is closer to $15 - $20 pre tax, with the average price of an ounce being $100 higher than in Los Angeles.2 

 

There is a state excise tax of 15% that is applied to cannabis retailers and distributors and across the state cannabis businesses roll that tax burden onto customers at the time of purchase. The state sales tax for cannabis is between 8 - 10% and is applied to all recreational purchases, as medical patients are exempt from this tax. Cities and counties are able to levy an additional tax on the cannabis businesses between 5 - 15% which also rolls onto customers at the time of sale.3 Taxes are vital to getting the funding needed for various government run programs from environmental clean up to improving public transit, but are the cannabis taxes too high? The taxes and operating costs for cannabis businesses have forced a lot of delivery services to close or possibly go underground into the illicit market. 

 

The overall cost of Prop 64 is too high if it restricts availability and affordability.

 


  1.  According to personal calculations of cannabis businesses still operating in my hometown.
  2.  http://budzu.com/prices/usa/california
  3.  https://www.covasoftware.com/blog/california-cannabis-sales-tax

Written June 30th, 2019. Originally posted to Tumblr, but removed and reposted on cannaciety.com on August 17th, 2019.

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