Fear of a federal marijuana crackdown in Utah?

What stopped state-run marijuana sales in Utah?  Fear of a federal crackdown?  Or something else?

“Officials in Utah last year abandoned a plan to operate state-run medical marijuana dispensaries, in part because of fears the federal government might intervene or withhold unrelated funding as punishment,” says a Boston Globe story by Dan Adams and Felicia Gans.

I don’t think those fears were warranted.  I suspect they were manufactured. Continue reading Fear of a federal marijuana crackdown in Utah?

Exaggerating mj taxes in California?

California story:  “The CDTFA says its analysts determined a 60% markup on wholesale collected by distributors must be raised to 80%. It will ensure the tax paid on all products is equal to 15% as required by law.  Cultivation fees are also going up. Basically, Blurton said that means a product that’s $60 today will be $70 tomorrow.”  https://fox40.com/2019/12/31/marijuana-dispensaries-worried-about-californias-2020-tax-increase-on-wholesale/

Not following the math.  I don’t know what figures to use, but I’m having trouble seeing why a product that’s “$60 today will be $70 tomorrow” on account of taxes.  Looks to me like it should go up a lot less.

  1. Cultivation per-ounce tax

Let’s say that $60 is for an eighth.  The cultivation tax on an eighth went from $1.16 (1/8 x the old rate of $9.25 per eighth) to $1.21 (1/8 x the new rate of $9.65).  That’s a nickel more tax, but maybe it gets marked up in reselling to . . . a dime?  A quarter?

  1. Retail excise tax of 15% of imputed price.

What is the new wholesale price that gets multiplied by 15%?

Say wholesale pre-tax and pre-markup price is and was $25.  The old markup was $15 (60% of $25); the new markup is $20 (80% of $25).  So the pre-tax price on which tax is calculated goes from $40 to $45.  The tax goes from $6 (15% of $40) to $6.75 (15% of $45).

More realisitically, maybe, say wholesale pre-tax and pre-markup price is and was $36.  The old markup was $21.60 (60% of $36); the new markup is $28.80 (80% of $36).  So the pre-tax price on which tax is calculated goes from $57.60 to $64.80.  The tax goes from $8.64 (15% of $57.60) to $9.72 (15% of $64.80).

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Hard to see why the after-tax retail price should go up by $10 when one tax goes up by a nickel and the other goes up by around a dollar.  There are markups on the taxes, but not 1,000% markups.  Maybe I’m missing something.  I’ll ask some friends in California.