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California escalates its war on the marijuana black market

(Eric Limon / Dreamstime.com)

A new 2022 law will punish anybody “aiding and abetting” unlicensed dealers. It will most certainly harm low-level workers.

Having utterly failed to end the marijuana black market in California, lawmakers have decided to backslide into the drug war by increasing fines on those who operate outside of the state’s very costly and tightly regulated legal cannabis system.

California will begin 2022 not just by increasing taxes on legal marijuana cultivation but also by introducing new fines against anybody “aiding and abetting” any unlicensed dealers in the state.

Lawmakers passed A.B. 1138 in September, and it was signed into law by Gov. Gavin Newsom in October to take effect at the start of 2022. California law establishing recreational marijuana already permits civil penalties against unlicensed marijuana dealers. A.B.1138 threatens civil fines of up to $30,000 per violation against anybody providing assistance to an unlicensed dealer. And each day of doing so counts as a new violation.

California’s implementation of recreational cannabis regulations, authorized by the passage of Proposition 64 in 2016, has been a massive mess. The ballot initiative allowed for municipalities to decide whether to allow cultivation and dispensaries, and two-thirds of them still refuse to do so despite the public vote. The state levies high cultivation and excise taxes that are escalated further by local sales taxes in any municipality that does allow for dispensaries to open up shop.

The result has been price and availability issues so severe that experts estimate that between two-thirds and three-quarters of all marijuana purchases take place through unlicensed dealers, which means that the state isn’t getting its share of the revenue. The problem is so severe that the editorial board at the Los Angeles Times recently acknowledged that high taxes for goods fuel black markets.

But instead of eliminating or reducing these taxes, the state is instead taking a more punitive approach. And it’s not just lawmakers looking to make sure the state is getting its cut of the money. The bill was introduced by Assemblywoman Blanca E. Rubio (D–Baldwin Park), but the Assembly analysis of her proposal explains that it was co-sponsored by the United Cannabis Business Association and The United Food and Commercial Western (UFCW) States Council, the union that represents some licensed cannabis industry workers. Several licensed cannabis industries and trade groups have also signed on in support.

To Read The Rest Of This Article By Scott Shackford on Reason.com

Published: January 05, 2022

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