Taxes on MJ: Still Cheaper to Buy Illegally?

[macbill]

I think newbies with no connections will buy legally. Many experienced users though will buy the cheaper product: they have already shown an inclination to buy from black mkt, so it's hardly a second thought. Poorer people, where every dime counts, will buy the cheapest, ie, black mkt. But if Bill Gates uses, he will buy legally: it would not be worth the trouble.

There will be an incentive for black mkt prices to be lower: otherwise, everyone will buy legal.

 

[Gunky]

The cannabis market has had several tiers in recent times. There are small and medium growers and then there are large and huge ones. The bigger end is often tied up with some form of organized crime. Market forces and stupid decisions by the justice department have pushed a lot of current production into the large and huge end. I have seen this first hand doing some small scale cultivation in CA indoors under high intensity lighting (ie what's known here as a 'medical grow'). I discovered that it's really difficult to make money like this. Those big producers have lowered the price to the point where the small guys have been priced out of the market (at least prior to the possible shortage looming at the end of the summer). These folks don't have any intention of paying taxes and helping support education and other issues in their state. IMO we should be moving away from all that illegality to a normalized state; just another crop. Let people make big profits if they can and pay taxes, just like the rest of us.

 

[mrboote]

I think newbies with no connections will buy legally. Many experienced users though will buy the cheaper product: they have already shown an inclination to buy from black mkt, so it's hardly a second thought. Poorer people, where every dime counts, will buy the cheapest, ie, black mkt. But if Bill Gates uses, he will buy legally: it would not be worth the trouble.

There will be an incentive for black mkt prices to be lower: otherwise, everyone will buy legal.

A bit of fantastic news that a lot of gloom 'n doom types seem to forget: There is no black market really! The cops won't bust you, it's not contraband anymore. If the the rec stores end up being too expensive, look in craigslist. There is already 21+ over delivery services that are totally legit and professional. The cops have been returning street-level dealer's weed to them, after warning them and letting them go.

http://www.thestranger.com/seattle/these-guys-deliver-weed-to-your-door/Content?oid=18638021

 

[Detonator]

The world needs to legalize cannabis, then we will see prices come down...... Way fucking down....

Mexico is talking about it...

Look at Mexico.. They can grow stuff too! I used to live next in Tijuana for a time when Avocados were like 2-3 for a dollar in the U.S. I could get a Kilo for about $1.75

I'm also looking at China...... Can they grow Chronic?

 

[CarolKing]

When they have cannabis selling in the stores in WA state, I may continue to buy the way I have been for the last 20 years, from a close friend. WA will be having around a 35% tax attached to the product. I noticed in one of the articles it said that stores wouldn't be ready until June of 2015 now. Last time I heard, it would be by sometime this summer. Who even knows.

I suppose the powers that be probably feel that the Feds may have their shit together by then on the cannabis issues.

 

[mrboote]

I noticed in one of the articles it said that stores wouldn't be ready until June of 2015 now. Last time I heard, it would be by sometime this summer. Who even knows.

@Pinnacle Pro, Would you mind sharing a link to that article, please?

[edit]I glanced at the article, it says nothing of the sort. I will be ignoring this user.

 

[CarolKing]

@Pinnacle Pro, Would you mind sharing a link to that article, please?

It was in the Olympian Newspaper and could be in the Tacoma News Tribune because they both are owned by the same company. It was on 2-20-14 Thursday. The paper is online as well as hard copy.

The article was called "State budget expects hefty pot boost" on the front page. Rachel La Corte from The Associated Press wrote the article.

My computer knowledge is limited, I don't do links. I hope this helps.

 

[macbill]

Taxes in Washington: from WA State FAQ: http://lcb.wa.gov/marijuana/faqs_i-502

The initiative applies a 25% excise tax on each level of the system: producer to a processor, processor to a retailer, and retailer to the customer. In addition, B&O taxes on the production and local retail sales taxes apply.

(My emphasis: tax on tax)

 

[420time]

what a great government we have.

 

[Enchantre]

Regular

Taxes in Washington: from WA State FAQ: http://lcb.wa.gov/marijuana/faqs_i-502

The initiative applies a 25% excise tax on each level of the system: producer to a processor, processor to a retailer, and retailer to the customer. In addition, B&O taxes on the production and local retail sales taxes apply.

(My emphasis: tax on tax)

Every business is subject to B&O, and the rates are available on the state's website.
B&O tax for manufacturers & wholesalers is 0.484% (just under a half percent).
Retailers pay 0.471% B&O.
Sales tax is paid by customers - businesses have to turn the sales tax over to the state.

The additional 25% tax is alongside B&O at each level; production, manufacturer (edibles & such), and retail. The customer will pay sales tax, at the regular rate for their location... the additional taxes, along with the normal B&O, normally is, and should be, absorbed by the markup at each level.
Hence, more expensive pot.

 

[macbill]

I created a little spreadsheet that shows the price at each level, including a 25% markup for each appropriate level.
Assume farmer sells a $130/ounce:


So a 130 price to distributor ends up being $429 + change. I am not a math person, but this looks right. Probably mark ups are low: it has to rent the space, pay the help, etc. 50% is more likely, or more.

So if you knew the grower, and she was willing to sell to you for $130/ounce--- what would you do, what would you do?

 

[t-dub]

if you guys dont want to pay so much then just find some seeds and grow it outdoors.

This does not happen by just being "Johnny Cannaseed" . . .

 

[MuushuPork]

The Colorado prices aren't that much higher then what I pay per oz here in Florida right now, so knowing what I'm getting strain/quality wise would make paying a few bucks more totally worth the cost for me. Its been $350-$400 an oz for a couple of years here.

Your talking to the wrong people my man

 

[420time]

Well damnnn, not like that much. I mean a few plants in like a 5gal containers. Just need to water it daily even if you don't feed it nutes you'll end up with a good 3-4 ounces from the 5gal bags.

 

[IamBenito]

without a doubt there are two pricing structures in my circle.
if you have a true need it is at cost or damn near free.
recreational/almost med use pays.
this flower has done so much there are times when one must give back.

This does not happen by just being "Johnny Cannaseed" . . .

holy haze bat man.
im in love!

 

[t-dub]

Well damnnn, not like that much. I mean a few plants in like a 5gal containers. Just need to water it daily even if you don't feed it nutes you'll end up with a good 3-4 ounces from the 5gal bags.

Its NOT about quantity its about QUALITY . . .

 

[420time]

^^ yes I know, it's still bomb weed if grown like that. I've grown different plants like ak47, blue mammoth, lemon kush and some other stuff outdoors and it was like indoor quality but just the smell isn't so good since all I really did was brown paper bag it and didn't even cure it much. How I feel is all it matters is the genetics of the strain. Best to get pest resistant,mold,mildew, loves the sun even without watering it for a whole week. Maybe get s bunch of autos which is pretty good quality but not that comparable to non autos. Autos feel less narcotic?

 

[t-dub]

You can't possibly understand what "like that" means from one very selective pic. If you knew the work behind it, you wouldn't say that. None of these strains are "auto" anything . . . .

 

[mrboote]

Ah, nevermind this topic has wandered way off into the woods... Glad you had a chance to trot that pic out again, t-dub!

 

[420time]

i understand what you mean t-dub, but all im saying is its not that hard to grow small amounts. im not comparing it to the pic you posted. your just misunderstanding what im saying.

 

[CarolKing]

@Pinnacle Pro, Would you mind sharing a link to that article, please?

[edit]I glanced at the article, it says nothing of the sort. I will be ignoring this user.

Some folks have the opinion that stores won't be ready by this summer, 2014. It's

@Pinnacle Pro, Would you mind sharing a link to that article, please?

[edit]I glanced at the article, it says nothing of the sort. I will be ignoring this user.

I was just stating what the Executive Director of the Economic Revenue Forecast council Steve Lerch for WA, said that stores may not open until June of 2015, which is in the article. I don't think anyone knows even the ones in charge what and when it's going to happen. Mrboote you said you glanced at the article, maybe you should read it.

They are estimating the state of WA will make 190 million in taxes over 4 years.

 

[macbill]

I, too, thought mj sales would start statewide this June. That was the story when I left home for warmer climes (I'm a Snowbird). But I just recently found info that puts that in jeopardy: cities and counties can forbid it if they so choose. Or so says State Attny General http://www.kgw.com/home/Wash-AG-Cities-can-block-pot-business-240573961.html. I live in Clark Co. Clark Co. Commissioners could block it until no longer Federal crime http://www.kgw.com/news/Clark-County-Commission-may-block-sale-of-retail-pot-239534091.html.
From 1st article:
"Elsewhere, some jurisdictions, including unincorporated Pierce County, Lakewood and Wenatchee, already have effective bans on pot businesses, because their local ordinances require businesses to follow state, federal and local law, and marijuana remains illegal under federal law.

Nearly three dozen of Washington state's 75 biggest cities, from Redmond to Pullman, have adopted moratoriums of up to a year on marijuana businesses."

I guess Black Market will thrive.....

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