Federal Marijuana Legalization Could Mean Higher Prices for the Golden State

Cannabis activists, businesses and consumers await federal legalization with bated breath. But a new report from analytics firm New Frontier Data warns that legalization would come at a price, with higher taxes, more burdensome regulation, and greater competition from the black market.

It’s a familiar scenario in California — one that has been playing out since 2018. The majority of cannabis sold in this state is still illegal, thanks to stringent barriers to market entry, high taxation, and fees.

New Frontier Data says that the plan proposed by Senate Democrats would make California’s situation even worse. On top of onerous new regulations, their bill would slap a federal tax on weed that would eventually reach 25%. That tax would “significantly increase the cost to consumers“ and make mom and pop businesses all but unviable.

Federal rescheduling is necessary and likely inevitable but it’s important for lawmakers to heed the lessons from states like California and avoid unnecessary mistakes.

Read the report’s key findings here.