In place of handcuffs and prison sentences to deter cannabis cultivation, California has established a vast system of taxes, fees and regulations to control it. The taxes are steeper and the rules more onerous than those in other agricultural sectors. Small California cannabis farmers say they are increasingly impossible to comply with given the glut of weed on the market and the plummeting price per pound of wholesale pot. “Are all the small farmers destined to fail? That’s our biggest fear,” a farmer said one recent morning. “It’s the War on Drugs Part II.”

In addition to paying cultivation and excise taxes, state licensing fees and other upfront costs, legal cannabis farmers have been forced to comply with intense tracking and testing regimens and an array of bureaucratic rules that dictate how they can farm their crop — some of which state officials have conceded are excessive and have begun to walk back.

READ MORE: https://www.latimes.com/california/story/2022-12-29/the-impossible-costs-of-cannabis-californias-legal-weed-industry-is-killing-itself

• Legal weed markets across the country are struggling to compete with nontaxed, illicit businesses, where consumers get better deals, despite potential health risks.
• In New York City, crackdowns are beginning to contain the “tens of thousands” illicit businesses contending with the state’s newly launched legal market.
• Cannabis company executives are sounding the alarm, especially as critical federal banking reform stalls in Congress.

Thriving, unregulated marijuana businesses across the United States are undercutting legal markets awaiting banking and tax reform. While it’s an issue in states like Colorado, Michigan and Washington, it’s a much bigger problem in New York. Unlicensed businesses are “taking a pretty hefty percent of the potential market share,” according to Amanda Reiman, a researcher at cannabis intelligence company New Frontier Data. None of the 36 newly licensed dispensaries in New York have even started operating yet. The licensing program in New York is years behind the state’s sophisticated black market. New York doled out its first set of dispensary licenses last month, but recreational marijuana has been legal in the state for nearly two years. READ MORE: https://www.cnbc.com/2022/12/23/marijuana-black-market-undercuts-legal-business.html