With a huge decrease in wholesale prices and an increase of flat tax rates, some of the world’s best weed and producers are on the verge of dying out.
It has been home to generations of outdoor cannabis growers and some of the best outdoor weed in the world since the early 1970s.
But thanks to the heavy taxation rate for cannabis cultivators, in combination with historically low wholesale cannabis prices, that livelihood is now in danger.
“Given the fact that we’re talking 50% or above of small farmers being bankrupt by spring time, it’s a significant issue,” said Tim Blake, founder of the Emerald Cup awards show and cannabis competition.
Proposition 64 is the law that legalized adult-use cannabis in the state of California in 2016.
Local taxes vary by city and county, but they tend to be between $1 and $3 per square foot of canopy growth, or the total area used to grow cannabis.
With wholesale pound prices in California currently as low as they’ve ever been, this tax burden makes it near impossible for small companies to survive.
However, there’s a race to the bottom of cannabis prices and an emphasis on selling the most for the cheapest.
“Right now, the wholesale market price is about $300 a pound.
Production costs include paying for growing, processing, and packaging the weed, paying employees, paying for testing and packaging, as well as distribution fees, and cultivation taxes.
In cannabis, regardless of that pound’s wholesale price, the flat tax rate of $10.08 per ounce still applies.
“It’s unfathomable that we are still being punished for .
If legacy cannabis cultivators disappear in favor of large-scale operators who produce low-quality weed at a low cost, a region that has always been known for some of the best weed in the world will be flooded with straight-up garbage weed.
Also, with large-scale operators producing low-quality weed will come an extreme lack of strain diversity.
“The greatest thing about small farmers is the diversity of cannabis and quality of cannabis,” said Taylor Blake, Associate Producer of the Emerald Cup.
Additionally, losing the legacy craft cannabis farmers of Northern California means losing a huge part of cannabis history.
Tax reform is needed, at both the state and local levels, so these small cannabis farmers can afford to operate.
“Newsom, who supported Proposition 64 as lieutenant governor, signaled… that help may be on the way.
Danté Jordan is a former member of the Leafly Subject Matter Expert team, and current freelance writer, video producer, and media consultant specializing in cannabis culture, strains, products, education, and everything else related to that lil’ green flower.
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