I stumbled on this brief item in The Los Angeles Times. Interesting, and maybe even a little bit amusing.
Pot shops owed millions in taxes. So California sold their bongs and pipes, and made $2,075
Not a great return on investment, is it?
I don’t think I’m going out on a limb when I say that an important factor in the rush to legalize recreational cannabis was the promise of a major influx of new tax revenue to the various states.
I’m not saying that state legislatures aren’t interested in setting free users wrongly incarcerated for minor offenses. It’s just that, well, taxes do produce much-needed revenue, and that’s always an issue for legislators.
Some years ago, when I was living and working in Washington DC, a veteran manager of congressional campaigns explained to me that the business of government was dividing up the pie. Making sure their constituents did as well as possible in terms of their share of the budget. Success or failure in that arena could make or break a political career.
So I was fascinated to read about California’s experience, as it includes the first time that state tax authorities have actually “…auctioned off personal property seized during law enforcement raids to try to recover the fees owed to the state.”
It probably won’t be the last time.
I’m told this is exactly what California authorities had hoped to avoid: the need to raid cannabis businesses and seize goods and products that would then have to be sold off, probably at a loss. But remarkably, per the Times article, during 2022 alone “nearly $90 million in products and cash were seized from businesses during 2,200 inspections.”
That’s in one year.
I suppose it has to to be done this way, if the goal, as one official described it, is to “discourage unlicensed cannabis activities and to help level the playing field for legitimate businesses paying their taxes.” I can’t think of too many other ways to enforce the law, other than to show up and inspect businesses for noncompliance. And levy consequences for violations.
Nonetheless, I can’t imagine California’s law enforcement (the Highway Patrol, for the most part) is eager to devote much of its time and resources to auctioning off an assortment of bongs, pipes, and other pot-centric paraphernalia.
Now I wonder if similar problems have emerged in other states. Will we eventually be reading annual sales reports on auction revenue from seized pot store products?
If so, then my guess is it won’t have been a money-maker.
