Cannabis Law And Markets: How Taxes And Regulations Impact Sales
By Tom Adams, CEO Global Go Analytics
Growth is inevitable in legal cannabis markets, as a worldwide $200-billion legacy market moves regulated channels. But results will vary as regulators in each new market experiment to find the right formula for free and legal – but taxed and licensed – markets.
The first US states to allow sales to all adults have decisively shown that liberal licensing of storefronts and lower tax rates both help to increase sales in adult-use cannabis markets, and hence shrink the legacy market. Of the states that fully legalized cannabis in the early-to-mid-2010s, Colorado and Oregon have the most liberal regulations in these regards. In Colorado, the tax rate for cannabis is 15% and there is roughly one dispensary per 13,500 citizens while Oregon has one dispensary for every 5,600 citizens and a tax rate of 20%.
Both states have achieved very high sales, according to estimates from The Brightfield Group. In 2020, per capita sales in Colorado reached $303 while they hit $230 in Oregon. For comparison, California, which did legalize adult-use slightly later than these states in 2018 but also started with an extremely robust medical program, had just $104 in per-capita legal sales in 2020. Much of this can be attributed to the lack of dispensaries – just one for every 54,600 citizens. California’s effective tax rate ranges from 23-38% and thus drives many consumers toward the legacy market for both easier access and lower prices.
Read on here: https://www.benzinga.com/markets/cannabis/21/07/22134294/cannabis-law-and-markets-how-taxes-and-regulations-impact-sales
About Global Go
Global Go provides sophisticated consulting services to the global cannabis and hemp industry. In tandem with strategic allies around the world, Global Go serves clients throughout the world from offices in Austin, Bogota, Chicago, Cyprus, Denver, Johannesburg, London, Los Angeles, Mexico City, New York, Palm Springs, Phoenix, Quito, São Paulo, Silicon Valley, Toronto, and Zurich. Powered by a team of cannabis industry pioneers and world-class consultants, Global Go helps leading cannabis funds and companies assess and enter new markets; acquire assets; raise capital; launch new product lines; improve SOPs; comply with regulations; implement technology and security systems; find talent; diagnose and execute solutions to growth obstacles; and apply for cannabis licenses (with a 99% success rate on over 175 cannabis license applications across the United States). Learn more at https://globalgo.consulting.