Tag Archive: Cannabis


Oregon has long been a taxing problem for California.

Motoring south along Oregon 101 last March, your author noted the strategically located presence of “Stateline Cannabis” about 100 yards north of the California line … and 0.40 mile away the Golden State’s Smith River Agricultural Inspection Station.

Driving my Mazda Miata little green chariot with its Oregon “Pacific Wonderland” plates, your clean-cut Almost DailyBrett author and his wonderful spouse, Jeanne, were simply waved through the inspection station.

Had to think: ‘What’s the point of the California Department of Food and Agriculture’s (CDFA) Smith River Agricultural Inspection Station, if they just send you on your merry way?’

The short answer is California is trying to protect its largest industry – agriculture — from dangerous pests. The question that immediately came to mind: What about Stateline Cannabis’ agricultural products?

Statewide Cannabis describes its business as a homeopathic pharmacy. Does the State of California agree?

Why should the Golden State care?

Oregon has zero sales tax.

In contrast, California has sales taxes up the wazoo, including an incomprehensible 10.5 percent in Los Angeles County.

Immediately germane to the Oregon 101 border region, California’s Del Norte County collects sales taxes of 7.5 percent and Humboldt County, 8.75 percent.

Oregon does charge a 17 percent tax on cannabis sales, including marijuana sold at Statewide Cannabis.

California in turn assesses the statewide sales tax, plus a given county’s portion of the sales tax, a 15 percent excise tax and a cannabis business tax. A $100 retail pot price results in a $124.20 total sales price.

Any which way you assess the question, cannabis is cheaper in Oregon than California.

More to the point, the export of cannabis from Oregon across state lines ist verboten, regardless of the fact that Mary Jane is also legal in Washington to the north and California to the south.

What if the Almost DailyBrett author was sporting a ratty beard and was driving a wreck on wheels with California plates … would he and his wonderful spouse, Jeanne, be merely waved through the Smith River Agricultural Inspection Station?

Don’t think so.

California Sales Tax + Interest for An Oregon Subaru?

Back in the 20th Century, your author purchased a new $16,000 Subaru Legacy as a lawful resident of Portland, Oregon. There were zero sales taxes charged or paid.

As Martha (Stewart) would say: “That’s a good thing.”

Two years later with a move to the Bay Area, there was the necessary evil in the form of an agonizing, mind-numbing and desultory visit to California DMV to register the Subaru and secure its plates and tags.

Houston we have a problem.

The State of California under the aegis of former Governor Pete Wilson’s Department of Motor Vehicles would not register Almost DailyBrett’s Subaru Legacy even though the car was bought legally two years prior in Portland, Oregon with no-sales-tax.

No amount of honey or vinegar was going to change a bureaucrat’s mind that day. It was pound sand all the way.

Pleasanton DMV flat-out refused to register the Subaru and provide the necessary plates and tags unless and until the applicable Alameda County sales tax was paid (presently 9.75 percent) applicable at the time of the sale (forget about depreciation) plus two years of compounding interest.

Your frosted author wrote a four-figure check on the spot in order to register the car. As the say in Avenue Q, it sucks to be me.

You can only imagine the surprise two years later when an unexpected envelope from California DMV arrived in your author’s mail box. California lost a lawsuit and was required to pay back the two years of improperly assessed sales tax, plus interest.

Thank you, Howard Jarvis Tax Association.

The Dynamic Effect of Tax Increases

“The art of taxation consists in so plucking the goose as to procure the largest quantity of feathers with the least possible amount of hissing.” – France Minister of Finance Jean-Baptiste Colbert

“Tax the rich. Tax the rich. Tax the rich. We did. Now, God forbid, the rich leave.” — New York Governor Andrew Cuomo

Almost DailyBrett is not making any aspirations against the folks at Stateline Cannabis, who are making a living selling a once-taboo product.

The inevitable issue is that many Californians will one way or another react and respond to ever-increasing taxes – call it the dynamic effect.

If a short drive over the California-Oregon border will result in paying less … plenty less … for homeopathic pharmaceutical products, don’t you suppose more than a few folks will be naughty rather than nice?

Something tells Almost DailyBrett the Smith River Agricultural Inspection Station is looking for more than hitch-hiking insects.

https://www.statesmanjournal.com/story/news/2018/12/31/oregon-pot-marijuana-exporting-weed-out-state/2415786002/

https://www.wweek.com/news/2018/04/18/oregon-grew-more-cannabis-than-customers-can-smoke-now-shops-and-farmers-are-left-with-mountains-of-unwanted-bud/

https://www.currypilot.com/csp/mediapool/sites/CurryPilot/News/story.csp?cid=4264302&sid=919&fid=151

https://www.salestaxhandbook.com/california/rates

https://www.oregon.gov/olcc/marijuana/Pages/FAQs-Taxes.aspx

https://lumatax.com/blog/california-cannabis-sales-tax-everything-you-need-to-know/

https://mjbizdaily.com/legal-hurdles-interstate-cannabis-exports-oregon/

https://almostdailybrett.wordpress.com/2018/07/23/mary-jane-supply-and-demand/

https://almostdailybrett.wordpress.com/2019/04/01/californias-rarefied-air-tax/

 

Oregon’s Mary Jane dispensaries are seemingly ubiquitous … They’re everywhere too.

Almost DailyBrett frequently wonders out loud how even über-liberal Eugene can support its preponderance of yoga studios and tattoo parlors.

Keep in mind that yoga mats and ink tats have nothing on Mary Jane.

What happens when a popular product, which was once Verboten and is now decriminalized (read: legal), loses its naughtiness and more than a tad of its hipness (e.g., demand side)?

And at the same time, what happens with the literal explosion of Mary Jane shops, sometimes two-or-more on the same street (e.g., supply side)?

Oregon is not Colorado.

Realtors will tell you that when the supply of houses goes up, the prices at best will stay flat or more likely, they will plunge (e.g., 2005-2010).

And when the supply diminishes and the number of buyers goes north, the prices most likely will go through the roof … no pun intended (e.g., the present).

Is the Mary Jane market a buyers’ market or a sellers’ market? Without a doubt: A buyers’ market.

Reportedly, the growing of Mary Jane in Oregon is three times the amount that legally can be sold.

According to the Bend Bulletin, there is more than 1 million pounds of Mary Jane in the supply chain.

Which brings us to the obvious supply chain question?

How long will it take for the weakest of all the Mary Jane shops (e.g., Economic Darwinism) to start going under?

Will they survive the calendar year? How many will remain? How many will enter the market?

Another question: How many prepared a business plan – yes, a business plan written by an MBA — before taking the plunge into the seven-point-leaf market?

Economies of Scale?

“No Industrialized Weed in the Neighborhood.” – Flatbed Bumper Sticker

Mary Jane may be the Wunder “medicine,” but the Laws of Economics still have this nasty habit of prevailing.

The average gram sale of Mary Jane ($4) is now less than a glass of wine ($8).

Does this price reduction mean that not only are the plethora of Mary Jane shops competing against each other (obvious result when the barriers-to-market-entry are so low), but will they also start cannibalizing the cannabis trade?

How many and who will prevail in an obviously overly saturated market?

Not that many, and those who can, benefit from economies of scale through sheer volume selling. Who will be the Philip Morris of the Oregon Mary Jane market?

Just as some low-barrier-to-market cigarette companies have still thrived by selling in volume even in the face of 400,000 of their customers dying each year, the same demands are placed on Mary Jane shops.

And when it comes to legal intoxicants, Oregon offers easy alternatives in the form of some of the world’s best microbrews – pales, ambers, IPAs, porters, stouts – from Deschutes, Full Sail, Ninkasi, Portland Brewing, Widmer and others.

Each of these brewers has also branched out into pubs, pairing finger-licking food with their own beers.

Did someone mention wine? Oregon has more than its fair share of wine bars and trendy restaurants.

Oregon’s temperate weather and terroirs are conducive to producing some of the best and yummy Pinot Noirs and Pinot Gris from the likes of, A to Z Wineworks, Adelsheim, Duck Pond, Firesteed, King Estate, Knudsen Erath, Rex Hill, Sokol Blosser, Sweet Cheeks, Sylvan Ridge, Willamette Vineyards, Youngberg Hill, and many, many others.

What is the lesson from this Almost DailyBrett epistle, and others that have been written on this subject?

Coolness is fleeting. Economics matter. Competition is inevitable. The Laws of Supply and Demand prevail.

In Oregon’s case, there are oodles and oodles of Mary Jane shops. Three-of-its-four neighboring states (i.e., Washington, Nevada, California) to the north, east and south have legalized cannabis. There is no Mary Jane Tourism to Oregon. That ship has sailed.

You can’t always get what you want, but if you try some time, you just may find, you get more than you need.

https://www.leafbuyer.com/blog/oregon-cannabis-market-in-trouble

https://www.opb.org/news/article/oregon-recreational-cannabis-supply-demand/

http://www.wweek.com/news/2018/04/18/oregon-grew-more-cannabis-than-customers-can-smoke-now-shops-and-farmers-are-left-with-mountains-of-unwanted-bud/

https://www.businessinsider.com/legal-marijuana-states-2018-1

https://almostdailybrett.wordpress.com/2014/01/20/nasdaq-weed/

“I’d be safe and warm if I was in L.A; California dreamin’ on such a winter’s day.” — The Mamas, The Papas, 1966

Let’s embark on a little California dreamin.’

What if … California voted to secede from the union?

calexit

The state would inform Donald Trump’s Washington, D.C. that all of its myriad of laws-and-regulations are now-and-forever “null-and-void.” Instead, the world’s sixth largest economy with a $2.42 trillion GDP would be going alone.

Welcome back: California Republic.

The precedent was set when South Carolina, an “S”-state, voted to secede from the union in 1860. Now California, another “S”-state as in “Sanctuary California,” could vote on Calexit next year.

Naturally, constitutional and historical scholars have a habit of getting in the way. They will point to the U.S. Constitution, which would need to be amended by a two-thirds vote of each house of Congress and then approval by three-quarters (38 out-of-50 or more) of state legislatures.

Besides, wasn’t a similar secession program settled at Appomattox Court House in 1865?

appomattox

Details, details, details.

If California votes to leave the union, couldn’t the state’s legion of fighting attorneys simply stipulate, pontificate and bloviate the Golden State is no longer part of the United States? The result would be that all federal laws … including the Constitution … are null, void, not biding and simply not applicable.

Finis. Endo Musico

The ball would then be thrown into Donald Trump’s court. Does he envision himself as the 21st Century comb-over Abraham Lincoln saving the union for the second time?

Would he be willing to go to war with California to save the union?

Trump is already implying a massive loss of funding to the state, if it dares declare itself a “sanctuary state,” defying to not notify federal authorities, when criminal aliens are apprehended.

Let’s say he follows through on his threat; the California Republic responds as suggested by former Speaker Willie Brown by withholding funds from Washington, D.C., and ultimately votes to secede from the union.

What comes next?

The California Republic

“California could very well become an organized non-payer.” – Former Assembly Speaker Willie Brown 

As a former press secretary of the Governor of California (George Deukmejian, 1983-1991), the author of Almost DailyBrett must ask: What would characterize a stand-alone, California Republic?

  1. California would be at least the world’s third-independent, one-party C-state opposing the wishes of the United States of America: California, China, Cuba. Republicans and members of similar subversive political parties would be subject to “extreme vetting” before receiving visas to enter sanctuary California.
  2. California’s highest 13.3 percent income tax rate would be combined with the present federal top income tax rate of 39.6 percent for a total marginal rate of 52.9 percent, all heading to the Franchise Tax Board in Sacramento. Those making less than $60,000 per year (e.g., California definition of wealth) would pay a lower rate on a sliding progressive scale. Each of the state’s 58 counties would be mandated to impose a minimum sales tax rate of 10 percent.

Meg-lev trains are expensive.

  1. Consistent with the California Sanctuary State … err Sanctuary Republic status, there would be no reason for a southern border, let alone a northern border with Oregon or an eastern border with Nevada and Arizona. Anyone could come and go as they please. The words, “contraband,” “illegal” and “undocumented” would be eliminated from the republic’s dictionaries.
  2. In order to avoid any and all unpleasantness with other nations (e.g., USA), California would establish a Department of Peace. The department would then oversee the republic’s Peace Army, Peace Navy, Peace Air Force, Peace Marines and Peace Coast Guard. Peace weapons would never be loaded, let alone fired.
  3. To stop real crime, the republic would establish a Department of Corporate Prosecution taking dead legal aim at those who buy low and sell high, employ tens of thousands, and make the products we need and use on a daily basis. These deep-pocket achievers deserve their just desserts before the Ninth Circuit Court of Appeals.
  4. California’s golden poppy would be replaced by cannabis as the republic’s official flower. These dynamic “flowers” can be used for ornamental, medicinal and recreation purposes. Sorry golden poppy your days in the sun are done. The same is true for childhood immunizations.
  5. The republic’s colleges and universities will replace annoying grading, testing and reading with everyone receiving the highest grade possible. The state would be flooded with 4.0 GPAs. Faculty would be instructed to provide trigger warnings, guarantee safe spaces, and excuse students subjected to opposing points of view.
  6. Hollywierd would dictate California’s culture and would serve as the republic’s propaganda ministry, ultimately controlling all legacy and digital media connections within the republic’s boundaries and beyond. There would be no need for a TMZ.
  7. California would impose strict mortgage and rent controls statewide insuring that no fixer-up bungalow in San Jose could exceed $1.6 million with an outlay of $1,000 per month in property taxes. Glad we got that settled.
  8. And finally all California commuters would be required to use electric, solar, wind or biomass transportation for their five-mile trips that take 45-minutes or more.

Is all of the above, California Dreamin?

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