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When the smoke clears Bay Area dispensaries grapple with heavy taxes, crime

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Published  April 20, 2022 2:49pm PDT
Cannabis
KTVU FOX 2

When the smoke clears Bay Area dispensaries grapple with heavy taxes, crime

Many dispensary owners in California have found making a profit to be very difficult for various reasons including heavy taxes and crime.

OAKLAND, Calif. - The owner of an East Bay dispensary has mixed feelings about the 4/20 holiday, marijuana culture's high holiday.

Though Tucky Blunt, the owner of Blunts and Moore in East Oakland, admits, "it's going to be a good day for us, for everybody in the Bay Area to commune and consume."

The ex-felon and former street dealer said even as some people celebrate, he needs to be blunt.

"If I had to just be honest, if I'm going the same rate as I'm going now, in another two or three years, Blunts and Moore won't be any here anymore," he said.

Roving group of robbers target Oakland dispensary

KTVU's Henry Lee reports.

The reason is that legitimate marijuana businesses are taxed heavily. And even though marijuana is legal in California, it's still a federal crime. Yet, Uncle Sam is still taxing cannabis businesses with no business tax deductions.

Blunt said, "We don't get any federal kickbacks. I don't get any write-offs. I don't get nothing."

He added, "We're deemed essential. I was deemed essential in 2020 and haven't gotten a federal dollar or PPP or nothing. We didn't qualify because we're cannabis."

Dispensaries said they're also coping with being robbed and burglarized.

Blunt's cannabis shop was hit last fall, despite having armed guards. He has insurance but said they don't cover the costs related to the robberies.

"From insurance to taxes to being robbed. It's hard to turn a profit. And I'm in business to try and turn a profit," he said.

Jerred Kiloh, president of United Cannabis Business Association said, "Now that the pandemic has kind of lifted and people are a bit more mobile, we are not seeing an increase in sales."

He said instead, the underground marijuana trade is thriving.

Kiloh said, "I think the hardest one right now is competition with an illicit market that has much cheaper prices when it comes to taxes, no regulations, and no permitting fees."

James Anthony, a marijuana attorney said taxes must be lowered and the other is that there must be more retail.

"If you're in the underground market, good for you! You're doing a helluva job. You're doing great. You're very unlikely to go to prison. Everybody who tried to go legal is likely to go bankrupt," Anthony said.