SAN DIEGO (FOX 5/KUSI) — The city of San Diego is considering extending the operating hours of cannabis dispensaries in an effort to boost tax revenue as legal marijuana sales decline.
Since the first cannabis shops opened in California in 2018, the industry has grown into a multibillion-dollar market, valued at $11 billion annually. However, recent years have seen a slowdown in the cannabis boom, affecting tax revenues.
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San Diego’s proposal to extend dispensary hours from 6 a.m. to 10 p.m. aims to compete with other cities in California that already allow longer operating hours. This move is seen as a way to revitalize the legal market amid growing competition from black market sales.
Despite the potential benefits of longer hours, the industry faces challenges with the upcoming increase in the state excise tax on cannabis. Starting July 1, the tax will rise from 15% to 19%, and when combined with local taxes, the total tax rate in San Diego will exceed 30%.
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The increased tax burden raises concerns about further driving consumers to the black market, where prices are lower due to the lack of regulatory costs. This situation presents a dilemma for policymakers trying to balance revenue generation with maintaining a competitive legal market…