Bloomberg: Cannabis ‘Tax Stacking’ Harms Legal Sellers and Drives Up Prices

Two cases in Missouri—one that is headed to court in May—seek to stop some counties from “tax stacking” a cannabis tax on top of one already being charged for city sales. These cases create a situation where cannabis companies and their customers are forced to pay far more taxes than what legislators originally intended.

Unfortunately, governments in cannabis-legal states have pushed through taxes that are burdensome. And in some cases, it’s impossible to comply unless the business comes out of its pocket and pays significantly more tax than it collects from its customers.

These government tax grabs have forced legal cannabis businesses to raise their prices to pay for the inflated taxes, making them less competitive and driving consumers to the illicit marketplace. Tax stacking also has reduced the amount of state and local taxes collected.

Amendment 3

Missouri’s Amendment 3 legalized adult-use cannabis sales on Nov. 8, 2022, authorizing an adult-use cannabis tax of 6% with the option for local governments to enact an additional cannabis tax of 3%.

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