Tax revenue from California’s marijuana market is a lot less than expected. The governor says the state will bank $355 million in marijuana excise taxes by the end of June. That’s about half of what was projected last year.
Industry experts say consumers are still buying pot in the illegal marketplace, where they can save money and avoid taxes. In some communities, the taxes are 50% of the purchase price.
Governor Gavin Newsom recommends a sharp increase in spending for regulatory programs. His budget calls for $200 million for marijuana-related activities in the next fiscal year. That’s a 50% increase over the current year.
Josh Drayton of the California cannabis industry association says, “the state was too optimistic about how the implementation of legalization was going to work.”