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Legal Weed Farms "Near-Death," Being Taxed Out of Existence

Legal Weed Farms "Near-Death," Being Taxed Out of Existence

Non-corporate pot farms that went legal are facing major difficulties due to taxes, specifically in California.

A new Washington Post article shares that the small cannabis farmer is "near-death" following marijuana legalization in the blue state nearly six years ago. One farmer, Drew Barber, 48, shared with the Post that he's "not making it," following the price of his product decreasing from $1,200 a pound to about $400 a pound.

The outlet's in-depth report says:

...[Barber's experience] is shared on the front porches of hillside homesteads across this valley where the King Range mountains and the San Andreas Fault meet the sea. The once-mystical heart of the nation’s marijuana industry is dying, fast, strangled not by law enforcement but by the high taxes and baffling regulation that have crushed small farmers...

The article notes that California's numerous taxes across the cannabis supply chain, differ significantly from taxes in other marijuana-legal states like Colorado and Nevada.

Furthermore, California officials broke promises to limit the size of cannabis cultivations and to cap the number of grower licenses it would issue. This has forced some small farmers into illegally selling their products across state lines in a desperate attempt to break even. 

It is worth noting that, effective July 1, 2022, California has eliminated its Cannabis Cultivation Tax. Per Forbes:

California’s regulated marijuana growers will see relief from some of the taxes that insiders say are stifling the industry with last week’s passage of a bill to eliminate the state’s cannabis cultivation tax. The legislation, Assembly Bill 195, was signed by California Gov. Gavin Newsom on June 30 after receiving broad bipartisan support in both houses of the state legislature the day before.

It remains to be seen, however, how much money this will actually save small growers on an annual basis.

If you are interested in learning more, the Golden State's official Tax Guide For Cannabis Businesses shares details about taxation on marijuana farmers.

What do think about California taxing small pot farmers out of existence?

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Rebekah Barton

Rebekah Barton

Rebekah's search engine optimization career began completely by accident as a college student. Over the course of her career so far, she has "grown up" with the SEO industry, from writing content while juggling classes to managing her own teams of writers and overseeing SEO strategy in subsequent roles. She is excited to bring her passion for high-quality content to CountingWorks, Inc.

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