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Taming California’s Black Market: “It’s Going To Be The Wild West”

Chris Roberts

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California is more Starbucks and suburbs than it is cowboys and Indians—and has been this way for a long time. But when it comes to wrangling its vast underground-marijuana economy, and turning longtime outlaw cannabis cultivators legit?

Buckle up, pardner.

The nation’s most populous state was one of four to legalize recreational marijuana for adults 21 and over on Election Day this year. 

Retail sales won’t begin until 2018 at the earliest, but already, state bean-counters are freaking out about the size and scale of the job before them.

Normally, the thought of $1 billion in extra tax revenue—the expected haul once the state starts collecting 15 percent excise tax on all sales beginning in January 2018—rolling through the gates would be exciting. It would be, if the state’s Board of Equalization had any idea of how to go about doing it. And they don’t.

It’s just going to be the wild, wild West out there,” BOE board member Jerome Horton fretted earlier this week,according to Medical Xpress.

It’s the BOE’s job to collect taxes and permit fees from all kinds of licensed businesses, not just marijuana producers or sellers, and doing that requires time and money. To count all of the marijuana-tax revenue that retail sales will generate by 2021, some BOE staffers think they will need $20 million and 114 full-time staffers.

That’s a fair-sized bureaucracy, but Horton thinks the state’s marijuana office will have to be much bigger, with jobs ranging from inspector and accountant to investigators with full police powers—and, quite possibly, legitimate firepower.

The BOE thinks convincing every cannabis producer to break good and pay taxes will be next to possible. According to the Xpress, “There are fears about possible violence against tax inspectors or investigators who go looking for hidden grows.” Meaning, if the BOE get its way, there will be a full-time California weed police.

Estimates of how many marijuana producers there are in the state vary, but it’s taken as a given that there a shitload. According to the California Growers’ Association, a lobby for—you guessed it—the state’s marijuana growers, there are as many as 55,000 cannabis-producing farms in the Emerald Triangle alone.

Not all of these will seek the licenses needed to sell weed to recreational-cannabis stores. Horton and the BOE expect to receive “only” 25,000 licenses to cultivate cannabis.

There are currently about 1,700 dispensaries that pay taxes in the state, and no estimate on how many cultivation operations are in business, since no state licensing is required for a grow, no matter how big.

Those are big numbers, apparently enough to instill real fear in the state’s accountants. Somehow, we think they’ll get along just fine.

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