X

San Diego Increases Revenue Through Controversial Marijuana Tax

San Diego enjoyed a $1.4 million sequential increase in marijuana tax revenue during the three months to June 30 after city officials ramped up collection efforts.

Marijuana producers should pay a tax on any sales they make within the city limits thanks to a measure approved by voters in 2016. However, many producers were unaware of this city tax, and officials have recently boosted efforts to collect what is due.

Most of the $1.4 million increase came from businesses outside the city that sold cannabis to licensed retailers within San Diego. The boost helped the city reach $8.2 million in marijuana tax revenue for the 2019 fiscal year.

Jessica McElfresh, a local attorney representing several local marijuana businesses, said many find the concept of the city tax confusing. She added that a lack of jurisdictional coordination among cities has made it challenging to collect the tax.

Many simply dislike the idea of San Diego taking a city tax on sales. “Some of these businesses find this concept very offensive,” McElfresh said. “There are people who don’t have any respect for the concept. Period.”

It increased from 5% to 8% in July, and city budget officials now believe they will earn $12 million from marijuana tax in fiscal 2020.

California faces a number of challenges as it bids to claim its fair share of tax from the cannabis industry. Businesses are forced to trade in cash as marijuana is illegal at a federal level and they therefore cannot access the banking system, which hampers the state’s ability to collect taxes.

Subscribe Now
Sign up to get Grizzle's latest news and analysis in your inbox!

Sending Message...


The thriving black market represents another major obstacle, as there is an abundance of cheap illicit cannabis across the state. However, a clampdown is gathering momentum.

Golden State authorities revealed they seized more than $1.5 billion worth of illegal marijuana in fiscal 2019, which is roughly equivalent to the size of California’s legal market.

The authorities raided 345 illegal grow sites and confiscated more than 950,000 plants. They also arrested 148 people.

Attorney General Xavier Becerra said illegal cannabis is devastating communities, poisoning waters and disregarding life, and warned that illicit growers will continue to be brought to justice.

The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Grizzle hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

Subscribe Now
Sign up to get Grizzle's latest news and analysis in your inbox!

Sending Message...


Categories: Marijuana Politics
Martin Green: Martin Green is an experienced journalist with a strong focus on the cannabis, alcohol, and gambling industries. He is particularly interested in the political issues affecting the global marijuana trade, and he has a keen focus on regulation changes and legal topics. He holds a BA English Literature, MA Creative Writing and a National Qualification in Journalism diploma. He has worked in journalism since 2009 and written for a broad range of newspapers, business titles and magazines, including The Sun, The Metro, The Journal, Livestrong, Drinks Retailing News, Harpers, Sportsbook Review, Vital Football, Essex Live and Surrey Live.
Related Post
Disqus Comments Loading...