“Research indicates that between 12 and 50% of psychotic disorders could be prevented if high potency cannabis products were not available,” said Washington state House Rep. Lauren Davis, one of the sponsors of the bill, as quoted by local news station KXLY.

Davis believes that the measure is necessary to combat what she describes as a “crisis.”

“If we fail to act now to counter the emerging public health crisis created by high potency cannabis products, we will soon have another epidemic on our hands,” Davis added.

The legislation, House Bill 1641, would restructure “the 37 percent cannabis excise tax to a tax of 37 percent, 50 percent, or 65 percent of the selling price, based on product type and tetrahydrocannabinol (THC) concentration,” according to an official legislative summary of the measure.

“[Thirty-seven] percent of the selling price on each retail sale of cannabis-infused products, useable cannabis with a THC concentration less than 35 percent, and cannabis concentrates with a THC concentration less than 35 percent,” the summary read. “[Fifty] percent of the selling price on each retail sale of cannabis concentrates and useable cannabis with a THC concentration of 35 percent or greater but less than 60 percent; and 65 percent of the selling price on each retail sale of cannabis concentrates and useable cannabis with a THC concentration greater than 60 percent.”

HB 1641, which had its first public hearing last week, would also establish the following, per the legislative summary:

“Marketing and advertising prohibitions on advertising a product that contains greater than 35 percent total THC … Prohibits cannabis retail outlets from selling a cannabis product with greater than 35 percent total THC to a person who is under age 25 who is not a qualifying patient or designated provider … Requires cannabis retailers to provide point-of-sale information to consumers who purchase certain cannabis products and requires the Liquor and Cannabis Board to develop optional training for retail staff … Requires mandatory health warning labels for cannabis products that contain greater than 35 percent total THC … Requires cannabis products to be labeled with the number of serving units of THC included in the package, and with an expression of a standard THC unit in volume or amount of product … Directs $1 million annually from the Dedicated Cannabis Account for targeted public health messages and social marketing campaigns.”

Not everyone is on board with the proposal, which has a dozen sponsors.

Carol Ehrhart, who owns a dispensary in the state, told KXLY that the proposed tax increase could lead to some adverse consequences.

“There’s this, you know, idea that the THC is going to get me further along. The higher that we make those prices, the more apt someone is to buy the higher priced item because they think they’re getting more bang for their buck when they’re really not,” Ehrhart told the station.

“A product that we’re selling right now for $40 that’s over the 60% threshold would go to $47, almost $48. You know, that’s seven or $8 in taxes on one piece of product,” Ehrhart added.

Washington became one of the first two states to legalize recreational cannabis in 2012, when voters there approved a measure that legalized possession and paved the way for a regulated market. (Colorado also approved a legalization measure the same year.)

The post Washington Lawmakers Propose Raising Taxes on Higher Potency Weed appeared first on High Times.

Green Market Report
Potency Tax Could be a Major Buzzkill for Sanctioned Cannabis Retailers 27 January 2023 at 00:26

Potency Tax Could be a Major Buzzkill for Sanctioned Cannabis Retailers

Green Market Report

By: John Schroyer

27 January 2023 at 00:26

This story was written in partnership with Crain’s New York, the trusted voice of the New York business community.

One of the most controversial aspects of New York’s new recreational cannabis market is its tax system, which some have worried will undermine licensed businesses by driving consumers to cheaper underground dealers.

A white paper published in December by a pair of New York tax attorneys, just weeks before the formal start of recreational marijuana sales on Dec. 29, warned of that very possibility. It predicted—and was proven accurate after sales launched—that a legal eighth of cannabis flower in New York with 30% THC would cost about $75.

Prices at Housing Works—the first state-sanctioned cannabis retailer in the five boroughs—proved to be not far below that, with prices fluctuating because taxes are based on THC potency. According to the nonprofit’s online menu, an eighth of cannabis flower ranges in price and potency from 19% THC for $40 to 27% for $60. With the 13% excise tax added, out-the-door prices would be between $45 and $68, respectively.

But if customers remain price-sensitive, as data from other mature recreational marijuana markets suggest, then they’ll broadly be willing to pay only as much as 10% to 15% above prices on the unregulated market, according to the paper, authored by attorneys Jason Klimek and James Mann.

By contrast, unlicensed street vendors in New York City last month were peddling cannabis eighths for between $10 and $45, Green Market Report found.

Combine that with overall lax enforcement to date against the underground market, and the situation has the potential to undercut state-licensed retailers—particularly smaller and less-capitalized businesses—before they can truly get off the ground, Klimek and Mann asserted.

Charles King, CEO of Housing Works / photo by Buck Ennis

Charles King, the CEO of Housing Works, said in early January that he doesn’t think the situation is that dire, and companies such as his will be able to survive as long as they stick to a solid retail business plan and tap the immense tourism market.

“I think people know that you’re paying for quality, you’re paying for the taxes and all the rest of what goes with the regulated, licensed market,” King said.

Still, there will have to be more of a focus on enforcement against illicit competition by state authorities, King said.

It’s a big undertaking, as many illicit operators already have brand recognition by offering legally produced but illegally shipped cannabis from California and Oregon, such as the famed SoCal brand Jungle Boys. That’s one brand name New York City resident Joe Lustberg, managing partner at Upwise Capital, said he ran into recently at a smoke shop.

“For some cannabis operator who’s competing with the smoke shop next door [that is] able to sell California eighths for $30 [and] that’s better weed than what they’re selling at Housing Works, it’s tough,” Lustberg said.

The tax structure also might be altered by the Legislature, because making the system more business-friendly is a top priority of industry interests in Albany, including for the Cannabis Association of New York.

“I do feel confident that the state is very much aware of the issue with the potency tax and, at the very least, open to reform,” said Brittany Carbone, a board member of CANY and a cannabis farmer upstate. “It’s been well proven that more reasonable tax structures actually result in higher rates of purchase in legal dispensaries, which results in a net positive win for the state, in terms of tax revenues.”

Even if the tax structure doesn’t change, cannabis attorney Lauren Rudick said, the THC-based potency tax will probably encourage the creation and sale of a more diverse range of cannabinoid products that don’t rely only on THC to please consumers. And that could be just what the burgeoning industry needs: more product variety.

By the Numbers:

$68

Highest price, with taxes added, for an eighth of cannabis with 27% THC sold at Housing Works

$10

Lowest price for an eight of cannabis bought on the street

The post Potency Tax Could be a Major Buzzkill for Sanctioned Cannabis Retailers appeared first on Green Market Report.

HighTimes Magazine
Weed-Funded Rec Center Opens in Aurora, Colorado 26 January 2023 at 08:00

Weed-Funded Rec Center Opens in Aurora, Colorado

HighTimes Magazine

By: Thomas Edward

26 January 2023 at 08:00

The city of Aurora, Colorado hosted a grand opening on Tuesday for its brand new 77,000-square foot, nearly $42 million recreational facility that was funded entirely by tax revenue generated from legal marijuana sales.

Known as the “Southeast Recreation Center and Fieldhouse,” the facility boasts a slew of amenities, according to local news station KDVR: “A 23,000-square-foot fieldhouse with temperature controlled indoor environment; A full-sized field with professional-grade turf; An 8,000-square-foot multiuse gymnasium [that] will be able to accommodate one main basketball court, two cross basketball courts, two volleyball courts or three pickleball courts; A 1/9-mile long track elevated above the fitness area and gymnasium; A 7,600-square-foot fitness area with state-of-the-art equipment, including: A functional fitness area; An outdoor fitness space; A fitness studio; A large community room; [and a] natatorium, which in turn is comprised of: A 125,000-gallon swimming pool with a maximum depth of seven feet; A spa pool with water jets; A leisure pool that includes a 25-yard, four-lane lap pool, a lazy river, and a 20-foot-tall waterslide.”

The city broke ground on the facility in early 2021, and it is the second new recreational facility to open in Aurora in the last four years.

The other rec center, which opened in 2019, was also funded by taxes from marijuana sales, according to KDVR. The news outlet Westworld reported that the Aurora City Council in 2020 “approved increasing the city’s sales tax on recreational marijuana from 7.75 percent to 8.75 percent, with the additional revenues going to fund youth violence prevention projects.”

“We are excited to open our newest recreation center and fieldhouse,” Brooke Bell, the director of the Aurora Parks, Recreation and Open Space, said in a press release from the city earlier this month. “After an extensive community engagement process, the feedback received guided the creation of this exceptional facility; we look forward to the community enjoying the space they helped envision for years to come.”

In the press release, the city said that the Southeast Recreation Center is located “near several neighborhoods and the Aurora Reservoir,” and that “the center is a regional destination boasting the first indoor fieldhouse within the city in addition to a variety of other amenities and breathtaking views of the Colorado mountains.”

The construction of the two recreational facilities in Aurora serve as “proof of concept” for advocates who helped Colorado become one of the first two states to legalize recreational cannabis a little more than a decade ago when voters there approved Amendment 64.

Supporters of marijuana legalization have long contended that a regulated cannabis retail market could be an economic boon for state and local governments.

“Colorado did what no one had done before,” Colorado Gov. Jared Polis said at an event in October commemorating the 10th anniversary of the state’s legalization measure, as quoted by the Denver Gazette. “With voter [approval] of Amendment 64, we made history and therefore it is fitting that we are celebrating today 10 years here at History Colorado.”

Polis, a Democrat, has worked to strengthen the marijuana law. Last summer, he signed an executive order “to ensure that no Coloradan is subject to penalization for the possession, cultivation, or use of marijuana as this substance is legal in Colorado as a result of Amendment 64,” his office announced at the time.

“The exclusion of people from the workforce because of marijuana-related activities that are lawful in Colorado, but still criminally penalized in other states, hinders our residents, economy and our State. No one who lawfully consumes, possesses, cultivates or processes marijuana pursuant to Colorado law should be subject to professional sanctions or denied a professional license in Colorado. This includes individuals who consume, possess, cultivate or process marijuana in another state in a manner that would be legal under Colorado law,” Polis said in a statement.

The post Weed-Funded Rec Center Opens in Aurora, Colorado appeared first on High Times.

Normal view

By the Numbers:

$68

$10