Marijuana Tax Passes By Wide Margin In Contra Costa County

November 7, 2018 8:13 am · 31 comments

A Contra Costa County measure to tax marijuana businesses in a similar fashion to those dealing in alcohol and tobacco won by a wide margin in Tuesday’s election.

Measure R needed support from a majority of Contra Costa County voters to pass, and more than 72 percent voters said yes, according to the unofficial results.

The 4 percent tax is on gross receipts at marijuana businesses in unincorporated parts of the county, plus $7 per square foot of garden canopy for growing operations.

Contra Costa County Supervisors John Gioia and Karen Mitchoff, both proponents of Measure R, argued that Measure R will reduce violent crime associated with illegal marijuana operations.

The Contra Costa Taxpayers Association filed an argument in opposition to Measure R, saying it would likely come with unintended consequences that might include tipping marijuana market conditions in favor of foreign drug cartels.

They also pointed out that allowing marijuana operations would put the county at odds with federal law, which still prohibits marijuana.

Barney R November 7, 2018 at 8:21 AM

And this is why private sales will thrive instead of paying ridiculous prices and taxes at a dispensary.
Why pay 2x the price at a dispensary.

Could you see private seller telling customer, oh wait I need to charge you tax…hahaha

SpyDeeze November 7, 2018 at 9:26 AM

Yup

Vero November 7, 2018 at 4:57 PM

Exactly. They already increase prices at dispensaries and astronomical amount this year. Sending consumers back to their old suppliers.

Ricardoh November 7, 2018 at 8:34 AM

Any tax put on the ballot that most people don’t have to pay will pass 100%. That way of imposing a tax should be outlawed. SF just passed a tax on big businesses to support the homeless. How fair is that?
Wait until our new governor brings his wrath on California. I can hardly wait.

Dawg November 7, 2018 at 8:45 AM

They have to pay federal income tax as well, and because their business involves trafficking of a controlled substance which is illegal, they aren’t allowed any deductions.

claytonpls November 8, 2018 at 2:04 PM

Currently many cannabis business are cash only and cannot pay federal taxes or put their money in banks. Its a funny situation with many states lefalizing medical and adult use cannabis while the federal govt doesnt catch up.

Randy November 8, 2018 at 2:25 PM

CA is working on a green banking system for these businesses

Not thought through November 7, 2018 at 8:47 AM

Over taxing legal business in this industry only creates one thing, and that’s illegal grows and distribution. I know a lot of people still growing, selling and buying on the black market because it’s simply – cheaper.

Barney R November 7, 2018 at 9:08 AM

@NTT

Dang right, growing and selling private is the smart persons niche. No grower in their right mind sells to a dispensary. You don’t even get your cash up front selling to them.
Dispensaries only drive up the private growers profits…
We can look at it as private weed growers and sellers aren’t so stupid after all.

Jojo Potato November 7, 2018 at 9:14 AM

Looks like similar taxes passed all over the Bay Area.

The Mamba November 7, 2018 at 9:36 AM

Creating taxes on growing and sales will just drive it underground, this tax is short sighted but after yesterday, consistent with what softhead California voters pass.

Bad Nombre November 7, 2018 at 9:47 AM

I think the county should tax illegal (under federal law) sales of firearms, too.

Fred November 7, 2018 at 11:08 AM

There is that line on your income tax to declare income from illegal sources. Kind of a catch 22.

Stupid Voter November 7, 2018 at 10:58 AM

Agree with all the comments above. Why drive up cost? What are voters thinking. And to tax businesses in S.F. To benefit the homeless is ridiculous.

NoMoreFreeRide November 7, 2018 at 11:03 AM

Why?

AnonZ November 7, 2018 at 11:28 AM

I’m growing my own for FREE. NO TAXES!!

J November 7, 2018 at 12:00 PM

Dumb idea…first I agree the “private sellers” who actually support the cartels will thrive. Sure some people who have disposable income will go to the pot shop but most will not. Simple economics…Supply and demand…there is a steady supply of cheap weed and there is a low supply of “legal” weed and they have higher expenses..meaning it cost more…and now you’ve added to that cost. This state has to tax everything before it even gets off the ground….it’s why we are losing small businesses across the state…taxes like rent is too damn high.

Second…what will they use the additional money for?…raises across the board for county employees that are overpaid already? Are people so dumb that they don’t see that every time they add a tax to anything, they ALWAYS either get a raise or waste the money on some ego project or both? Concord added a “temporary” sales tax…then they extended it…will they ever get rid of it? Doubt it.

It’s like the gas tax…if you looked at a ballot, It was worded to say that it was to repeal a tax approved by voters…what voters approved the gas tax initially? I certainly didn’t…Where’s all the money I already pay in my registration and gas taxes going? Why do they need more?…California has more vehicles on the road we pay the highest prices for gas taxes and with the largest registration fees in the country, why do they need more? Where’s the accountability for the current money going into the state from those costs? Funny how every other state can charge less for gas tax, less for registration and have better roads…

Are California voters really this dumb? or do we just pack it in and go completely socialist? BTW…that’s worked out so well for other countries…everyone that tried it went broke…

avacado dan November 7, 2018 at 12:33 PM

Not good this passed. The CCC supervisors supporting this one were obviously high or just pre-occupied with other measures. Probably the latter.

Greorge November 7, 2018 at 1:07 PM

This extra tax will also increase the black market, creating more crime.

Barney R November 7, 2018 at 5:29 PM

It’s not black market at all, it’s right out in the open public selling. Taxes will only raise prices at dispensaries while privateers can still undersell them by 50% and still make huge profits.
It all comes down to the stupidity of the politicians and voters to raise the taxes of it.

I hope they tax the crap out of everything dispensaries sell cause it let’s the rest of us profit immensely.

Original G November 7, 2018 at 4:43 PM

Windfall for criminal elements. All they have to do is sell below the “legalized” price because consumer always seeks lowest price.

“Study: Calif. Pot Industry Staying Illegal to Escape State’s High Taxes, Onerous Regulationst”
https://www.cnsnews.com/blog/craig-bannister/study-calif-pot-industry-stays-illegal-escape-states-high-taxes-onerous

“California considers lower taxes on pot to help new legal industry compete with black market”
http://www.latimes.com/politics/la-pol-ca-pot-tax-reduction-california-legislature-20180315-story.html

New York raised taxes so much on tobacco they created a thriving and lucrative black market.
https://nypost.com/2018/01/01/nys-futile-fight-against-illegal-cigarettes/

Will have to see if CA crime related to illegal pot sales increases.
Could taxes on pot cause an increase in gang activity and violence if they decide take up illegal pot selling ? ? ?

But rest assured Democrats figured out long ago how to correct ALL the problems that might come up . . .

Original G November 7, 2018 at 8:12 PM

State politicians saw in pot sales a huge new source of revenue to squander. Unfortunately it seems many have a simplistic hubris, almost science fiction view of the world in which none of their ideas or decisions are ever wrong or have negative consequences.
An if it does happen they ignore, blame others or simply throw more of our tax dollars at problems usually of their own creation.

AB-109 in 2011, their answer to prison overcrowding, ended up causing massive overcrowding of all 58 CA County jail systems so they hatched Prop 47, spending $10,306,082 to con voters into passing it, to make it harder to charge criminals with a Felony thereby reducing time criminals spend in county jails.

After all we need to remember it is not like they’re spending their money, so why should they worry if what they try doesn’t work ?

rich November 7, 2018 at 8:20 PM

Why would anybody grow anything in an area @ $7.00 a square foot?

Barney R November 7, 2018 at 8:34 PM

And dispensaries are cooking their books big-time cause it’s all cash only business, you report ONLY what you want to report,cthats the beauty of cash only.
The state politicians don’t have a clue!

Weedeater November 7, 2018 at 9:55 PM

What is left to be taxed? Air?

Fitzwilliam November 8, 2018 at 2:11 AM

Tax the living hell out of it.

AJ November 8, 2018 at 4:06 AM

Yeah I don’t think that most people who voted for this took the time to think it through. Not every county in CA is going to have a tax like this, so if you are setting up an above the board cannabis agribusiness would you do it in Contra Costa? Nope.

Not only does this actually result in less money for the county, since it drives new businesses away, but we also lose the mid-income jobs that these operations would provide. In an area that is already lacking sufficient above min-wage jobs for it’s populace, enforcing a regressive tax like this pretty near-sighted.

Barney R November 8, 2018 at 8:39 AM

Exactly as I commented above voters and politicians who push/vote for more taxes are fools.
All cash business and more taxes…gee you think they are gonna report their actual sales…ain’t gonna happen.

GrowerBob November 8, 2018 at 10:25 AM

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Happy Camper November 8, 2018 at 3:06 PM

As a user and medical patient I am extremely happy with the passing of this measure. I completely understand the argument that this tax will drive underground business in the cannabis industry but I have to disagree. This tax is so much more forgiving than the ones implemented in nearby counties (its up to 33% in SF). Not to mention the convenience of not having to travel out to Berkeley/Oakland/SF will drive profits in the county. Contra costa has never been known to have a large underground cannabis industry, meth labs and crack are generally a bigger issue in the county.

YourLocal November 8, 2018 at 8:55 PM

Just sounds like voters still don’t want marijuana business in contra costa. Which is fine, it’s easy to get delivered to your doorstep anyways.

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