Cannabis dispensaries fight to stay afloat under layered taxation system

By Ken Magri | Solving Sacramento Despite the legal cannabis market initially seen as a golden enterprise for generating local tax revenues, Sacramento dispensary owners say they are increasingly unable to turn a profit. There is concern among these local business owners about high overhead costs, competition from unlicensed sellers and especially, multiple tax rates.& “Dispensary sales within the city of Sacramento have significantly declined over recent years, largely impacted by the economic downturn,” said Kimberly Cargile, an advocate for the National Cannabis Industry Association since 2007 and CEO of A Therapeutic Alternative dispensary since 2012. “Sacramento is currently overtaxing cannabis businesses, and in my opinion the tax is discriminatory.” Outgoing Sacramento City Councilmember Katie Valenzuela echoed Cargile’s comment. “I’ve been hearing from businesses throughout the city that the high costs are hampering their ability to survive,” she said. “Reports of layoffs in an industry that employs a diversity of Sacramento residents are troubling. No one benefits if these businesses are unable to survive current market conditions.” While over-regulation and competition from unlicensed sellers create separate problems, high taxes remain the largest concern because they drive prices up. Cargile feels that such high prices are “inadvertently boosting the unlicensed market.”...