LAO Recommends Changes To California’s Marijuana Tax Structure

Sacramento, CA — The state’s Legislative Analyst Office is recommending California lawmakers overhaul the way marijuana is taxed.

Currently there is a 15-percent state tax placed on sales. A report from the LAO encourages the state to instead place a sales tax on the drug based on the potency of the product being sold. By creating a new tiered system, the LAO argues that it could reduce harmful use more effectively.

The Associated Press reports that industry groups have expressed openness to the change, as cannabis revenues have been falling short of state expectations over the past three years.

The report argues that the status quo is not working as an estimated 75-percent of marijuana sales in California are still done on the illicit market.