While many were optimistic about how recreational marijuana legalization would go in California, in the first six months the state’s sales are below expectations and many people are staying in the black market. And now we know why that is.
Marijuana delivery company Eaze conducted a survey of marijuana users in California and Colorado to help inform the industry about consumer behaviors. In the survey, one in five people from California said they had purchased marijuana from an illegal source in the last three months. 84 percent of people who had purchased illegal marijuana said they did so because the illegal market is cheaper and doesn’t have any taxes. The survey also found that a simple five percent cut to the state’s marijuana tax would bring 23 percent of illegal users back to the legal market.
Even people who use the legal market weren’t happy with the taxes. 47 percent of Californians said their biggest complaint about the legal industry was the taxes. The second highest complaint was lack of electronic payments at 36 percent.
Taxes were always a concern for California when legalization began. Many noted that California was instituting taxes at a higher rate than most states that legalized marijuana, and many worried that it would lead people to stick with the black market. Considering the struggles early on for legalization, that seems to have panned out.
Some politicians have suggested lowering taxes, even just temporarily, to help give the industry a boost. But so far those proposals have been shot down.