SANTA BARBARA COUNTY, Calif.—Tuesday was a fairly busy day at Embarc in Ventura.
But that all could change come July due to a scheduled tax increase.
“I think it's just going to make it harder for the industry to thrive and therefore it will be less taxes for the county. So but again, I don't think it's just because of that, that one tax. I think it's an overall problem with the market and the fact that there's a glut and we have too much cannabis being grown,” said Santa Barbara County Supervisor Laura Capps.
Cannabis dispensary owners are urging the California legislature to freeze the excise tax increase at its current 15% rate.
If they fail, the tax is scheduled to increase to 19% on July 1st.
Embarc Co-Founder Dustin Moore says more taxes could crush retailers.
“Even if we suffered a 10% reduction in sales as an industry, that at 19% tax, the state would actually end up losing money. And we feel with almost near certainty that an increase in the tax rate will further push folks from shopping in the licensed and legal market to the illicit, unlicensed market,” said Moore.
“When you're trying to find the right products to help you with real issues and you're trying to get off of alcohol or you're trying to get off of opiates or things of the like, increasing that difficulty is never a good thing,” said Embarc Assistant General Manager Sean Smith.
The California Cannabis Operators Association says more than 60% of cannabis sales come from the illicit market, which Moore says is a big risk to consumers.
“We saw just a couple of years ago in the Central Valley that there was an epidemic. It was called the vape crisis, where untested vape products were poisoning people,” said Moore.
There are signs California's legal cannabis market is declining.
More than 10,800 cannabis licenses are now inactive or surrendered, exceeding the number of active licenses statewide.
Cannabis tax increase causes a stir among local retailers News Channel 3-12.
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