A licensed California cannabis company owner has filed a civil lawsuit against the state’s Department of Cannabis Control alleging that outrageously high taxes on lawful distributors and lack of enforcement against illegal operations has made the industry untenable for those trying to do it by the book. As it stands, the state’s excise tax on cannabis is 15 percent. Municipalities can also set their own rates. Plaintiff, a Catalyst Cannabis Company, alleges these tax rates are effectively smothering the legal cannabis industry in California. Operators of pot shops throughout the state are “treated as second class” members of the business community, while they burden an unfair share of taxes and receive little protection against the unfair competition of illegal operators. In a press release, the plaintiff told state media outlets the goal of the litigation was partly to glean information about what state regulators know regarding illegal distributors and partly to compel them to participate in reasonable cannabis industry tax reform that would allow legal operators to survive.
Cannabis Law Group’s Medical Marijuana Legal Blog, 10/21/2021 12:40:00