Even if they aren’t saying it, every leader in Government is privately thrilled about how much taxes will be coming in the door from the cannabis industry. Unfortunately, none of them are thinking about how to grow an industry. They might want to consider talking to people who have built businesses over the past twenty years instead of listening to every lobbyist that sticks their head into their offices.
Schumer, Booker, and Wyden’s tax law that is trying to get passed only makes the industry harder to grow. No pun intended. Besides the restrictive requirements and restrictions in the state and local licenses that don’t include cultivation, retail, seed-to-sale tracking, packaging, labeling, compliance, employees, rent, etc., to run a business, you are competing with the illegal market that has operated almost seamlessly for many decades. This tax law calls for a federal excise tax starting at 10% and rising to 25% by the fifth year will only help one thing, the black market.
Perhaps they might consider talking to early-stage investors who have invested in software products. Those companies begin with low costs to engage, learn and create better products over time. As each new product is rolled out, companies will gladly pay more if the product works and the ROI is clear.
Multiple players in the cannabis space are working extremely hard to build an industry. Wouldn’t it make more sense to keep the taxes low, let the industry flourish and then return to the taxation based on the success and data? Once there is data, there can be the correct taxation, deductions, and anything else that needs to be done.
Right now, they are making these numbers up on the fly, hoping that the Government makes as much as possible. That is not how to build a new business. At the state level, NY is trying hard not to make the same mistakes in the states that have come before them in the legalization of cannabis. It isn’t easy.
Schumer, Wyden, and Booker should spend some time in CA talking to dispensary owners, cultivators, and brands before shoving through this absurd overtaxed bill. Can’t Government for once get out of its way and speak to the people on the ground, not the big companies, to see what is needed to benefit all the players, including the Government?