When a state legalizes cannabis, it also needs to decide how to tax the new industry. Should taxes be levied on the sale price of marijuana, or maybe its weight, or potency? How high should taxes be? Here are some ways the financial, social and competitive factors of this young and complicated industry can influence tax decisions:
Cannabis availability can put upward or downward pressure on taxes. When neighboring states begin selling legal cannabis, there’s downward pressure on tax rates because policy-makers don’t want residents driving over the border for their purchases and spending their tax money there.
On the other hand, as a state’s cannabis