Business Cannabis News

Why Is LA The Most Expensive Eighth And Las Vegas Is The Cheapest?

New data released by Flowhub finds the price of a $35 eighth of cannabis in U.S. cities can vary by as much as 15 percent after taxes have been applied. Now that cannabis is being regulated by cities and states with complicated tax codes, consumers can pay 20 to 40 percent tax on their purchases.

The cities included in the data were Boston, Denver, Las Vegas, Los Angeles, Portland, San Diego, San Francisco and Seattle—the top eight major urban cannabis markets. The amount of cannabis reviewed was a $35 1/8 ounce of flower.

Most expensive was Los Angeles, with a cost of $48.48. In LA, the 35 percent taxes include excise, sales, and business-REC taxes. Taxes in California are calculated against the subtotal and applied taxes. For example, in San Francisco, the state sales tax is 8.5 percent of the subtotal plus the excise tax.

Interestingly, prices in the three California cities differ by quite a bit. Eighths in San Diego and San Francisco cost $45.54 and $43.67, respectively. That’s almost $5.00 less than the price in Los Angeles. San Diego taxes at 27.75 percent and San Francisco, 23.5 percent—a big difference from LA’s 35 percent.

Although it only includes an excise tax, Seattle was second in price on the list, at $47.95. It also has the highest tax rate at 37 percent.

Denver places the largest number of taxes on cannabis of any of the cities on the list. The 26.15 percent taxes include a state cannabis retail tax, state and municipal sales taxes, a Denver retail marijuana tax, an RTD tax, and a cultural tax. Still, with all these taxes, Denver was 4th in price, at $44.15.

Eighths in Boston and Portland are taxed at 20 percent and both have a cost of $42.00. Boston places excise, state sales and local municipal business taxes on cannabis, while Portland has two taxes: OLCC state and Portland city.

Las Vegas came in the lowest priced at $41.39. Taxes there run 18.25 percent and consist of a state recreational cannabis tax and sales tax.

Smaller dispensaries and entrepreneurs are fearful that high taxes will force them out of the market, so Flowhub has some advice for them. It includes understanding local laws, keeping detailed records, setting an order of operations for tax calculations and being upfront with consumers. They also suggest fighting for fairness by lobbying lawmakers for responsible regulations in the cannabis market.

To Read The Rest Of This Article By Peggi Clough on Green Market Report

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Published: August 03, 2018

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