L.A. voters to decide: Should illegal cannabis shops pay the same taxes?
Los Angeles voters will decide on Measure CB in the June ballot. The proposal aims to tax illegal cannabis businesses at the same rate as legal ones. Supporters claim it could raise millions for city services while critics warn of unintended consequences. The illegal cannabis market in L.A. is believed to be as large as the legal one. Currently, unlicensed sellers avoid taxes and fees, giving them a financial edge over licensed operators. Measure CB seeks to close this gap by imposing identical taxes on both.
Under the measure, illegal businesses would face a 10% tax on recreational cannabis sales, 5% on medical cannabis, and 2% on activities like cultivation and manufacturing. These rates mirror those paid by licensed operators. Proponents argue this would create fair competition and bring in much-needed revenue. City officials estimate Measure CB could generate between $30 million and $35 million each year. The funds would support services such as street repairs, emergency response, fire protection, and park maintenance. However, revenue might drop over time if more illegal businesses are shut down. Opponents counter that the measure could make illegal operations seem more legitimate. They also fear it might discourage the city from cracking down on unlicensed sellers. Meanwhile, some council members believe the tax could actually push illegal businesses to close by removing their cost advantage.
The outcome of the June vote will determine whether L.A. adopts this new tax approach. If passed, Measure CB would mark a significant shift in how the city handles illegal cannabis sales. The decision will directly impact both revenue streams and the enforcement of cannabis regulations.
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