November 9, 2016 | by Staff
by Ontaria Woods
In the November election, there will be a total of nine states voting to legalize cannabis for recreational or medical use. However, with California having the largest economy in the U.S., and ranked sixth largest economy in the world in 2015, Proposition 64 will have the greatest influence on the cannabis industry thus far.
With polls showing an almost 60 percent passing rate, Proposition 64 will allow persons over the age of 21-years-old to use marijuana for recreational use under state law, and sales and cultivation taxes will be established.
The California economy will “put pressure on the government to reclassify or deschedule the drug to help ‘cannabusinesses’ better conduct their operations with more access to banking services,” said Jessica Rabe, a research associate at Convergex, a global brokerage company based in New York.
The Proposition would create two new taxes on marijuana:
• A cultivation tax of $9.25 per ounces for flowers and $2.75 per ounce for leaves.
• A 15 percent tax on the retail price of marijuana
Local governments could tax even more.
According to Daniel Yi, Director of Communication at MedMen, a leading cannabis firm based in Los Angeles, “In California, passage of Proposition 64 could add $8.38 billion in annual sales to an already robust medical market worth an estimated $2.83 billion.” Legal marijuana is already estimated as a $7 billion dollar industry in the U.S.
Citing Federal law, U.S. banks have refrained from business deals with pot establishments even though in 2014, the U.S. Treasury Department allowed banks to offer accounts and other with under certain guidelines.
Sarah Trumble of Third Way believes that if sales estimates are correct and the industry becomes a multi-billion dollar one as predicted, the big banks will begin working with pot establishments.
“Prop 64 includes many progressive measures aimed at helping small businesses grow and prosper, allowing everyone a chance at the American Dream,” Mathew Stang, Chief Revenue Officer of High Times Magazine said,“ We need a cannabis industry as progressive and inclusive as the cannabis movement to move past the prohibition era into a bright new future.”
California’s expected revenue with Proposition 64 can influence other states to legalize cannabis, which will then bring more pressure on the Drug Enforcement Agency to alter the classification of marijuana as a Schedule 1 drug.
“The potential economic impact of Prop 64 cannot be understated, and we hope that a victory in California will inspire other state governments to reconsider their archaic and destructive stance on cannabis,” said Mike Bologna, Chief Executive Officer of Green Lion Partners.
Ontaria Woods is a multimedia journalism student at Georgia Southern University. She is a member of the National Association of Black Journalists (NABJ), and works as a volunteer for the National Academy of Television Arts and Sciences (NATAS). With her expected graduation in May 2017, she looks forward to continuing her Journalism career as a writer and photojournalist. Follow her on Twitter and LinkedIn.
Categories: Cannabis Politics
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