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Taxes May Raise Price of Legal Marijuana in San Diego

When marijuana becomes legal for recreational use in January, customers could be shocked by the high cost of getting high

Paul Krueger, KNBC7 SAN DIEGO

Thursday, November 2, 2017

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“If we continue to impose too many regulations and (taxes) on marijuana, then we’ll continue to have the black market,” said Kelly Cunningham, senior economist at the National University System in La Jolla.

Cunningham said research reveals that taxes of up to 50 percent on marijuana now sold legally in other states has pushed some users to buy their pot from illegal dispensaries or street dealers, who don’t pay taxes, and have lower, or no, overhead costs.

He pointed to studies that show a tax rate of 33 percent in Colorado has hindered that state’s effort to wipe out the black market for marijuana.

Cunningham said basic economic rules of supply-and-demand and competitiveness will determine what happens in San Diego, but he thinks even a 33 percent tax will encourage some customers to buy their pot on the black market.