In a move that left the legal cannabis industry “stunned and outraged”, the State of California raised the tax rate on the industry once again, bringing it to as high as 50% in some California municipalities. In addition to hurting legal marijuana business, it has also pushed buyers back to the illegal market where the untaxed product is now significantly cheaper.

With the new tax rate, buying 8oz of legal marijuana in California is expected to increase by $5 or more in 2020 once the taxes to into effect January 1. That 8oz bag already costs between $40 - $50 with the current, high state taxes.

This widening of the already large gap between the legal and illegal market is predicted to drive even more purchases underground. Industry analyst already believe the illegal market outsells the legal one at a 3 to 1 clip. The California cannabis industry had been pleading with the State to lower the tax rates as it was already prohibitive for businesses.

This news is not all that shocking to observers as the California Governor, Gavin Newsom, is a Democrat and the State Legislature is one of the 14 in the country that is under Democrat control.