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How The Marijuana Black Market Is Affecting Local Dispensaries

LOS ANGELES (CBSLA) – It has been about a year since California rolled out the legalization of recreational cannabis, and now that dispensary owners have had a whiff of the weed business, some say the cost of running a legal pot shop is burning through their profits.

Jake Welty is the general manager at Captain Jack’s in San Bernardino. He says it’s a struggle to compete with lower prices at illegal pot shops, especially when the legal businesses have to add on the cost of three different taxes.

“Do I think the tax rate is too high? Absolutely, because I hear it every day from customers coming in the door,” he said. “Because the illicit market, the black market, is incredibly vibrant in California.”

Customers seemed to agree.

“There are other outlets where you can get it a lot cheaper,” Suzanne Urbanek said.

In San Bernardino, dispensaries are taxed 29 percent: a 15 percent excise tax, 6 percent city tax and 8 percent sales tax.

To Read The Rest Of This Article By Staff on CBS 2 Los Angeles

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Published: February 11, 2019

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