Sunday, July 14, 2024

How Some Consumers Avoid Paying High Taxes For Recreational Marijuana

Some customers would rather take their chances with shady street dealers than suffer the high taxes they’re being asked to pay at the cash register.

Now that marijuana is legal for adults 21 and over in 11 states, droves of cannabis aficionados should be pouring into those areas like wild-eyed fiends to take advantage of this newly legitimized scene. And they are, in fact, doing just that. Until, that is, they slide into a dispensary and discover that they do not have enough cash for both the cannabis products they want and the high taxes being slapped on them at the cash register.

Many cannabis customers have left their neighborhood weed stores fuming mad over this issue, vowing to return to the black market until states get their act together and lower the tax rate associated with legal weed. 

Meanwhile, some crafty folks in the cannabis community have figured out a way around the tax scam, and in some cases, these people are even getting permission to move to the front of the line.   

In Illinois, where marijuana was officially made legal at the beginning of the year, one of the biggest complaints coming from cannabis customers is the taxes are just too dang high. And they’re not wrong.

The Land of Lincoln has one of the steepest tax rates in the nation attached to its legal cannabis trade. Customers who step inside a dispensary have to pay 10 percent extra for flower, 20 percent for edibles and 25 percent for any product that contains more than 35 percent THC. This is, of course, before state and local taxes, which can force some customers to pay in upwards of 40 percent more than the retail price. 

RELATED: Who Wins From Marijuana Taxes? It’s Not Always Who You Think.

It’s one of those situations where some customers would rather take their chances with shady street dealers than suffer this extortion.

But others are simply playing the game by getting in on the state’s medical marijuana program. Not only does this allow them the advantage of paying a modest 1 percent tax rate on legal cannabis products, but the state of Illinois also mandates that card-holding customers get to move ahead of long lines. 

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No kidding, the Illinois Department of Health recently reported a 34% uptick in new medical marijuana applications. It seems that people have learned that they can evade the inflated taxes on marijuana by merely getting a doctor to sign off on their pot use. After all, all of the weed being sold in the recreational and medicinal sectors is all the same. It’s a stroke of genius, really. 

Illinois’ medical marijuana program is a few years old. Sure, it started out with all sorts of restrictions, allowing only those people with a handful of severe or debilitating conditions to participate. But the program has evolved over the years. Now, pretty much anyone can apply for a medical marijuana card as long as a doctor can show it is needed for one of around 50 conditions. The most common in any medical marijuana program is chronic pain, according to reports

RELATED: Cheap Marijuana: Good For You, Bad For States

While some people do, in fact, suffer from pain conditions and have experienced much success from cannabis, others have found that they can use this condition as a gateway to recreational pot use since it is difficult for healthcare professionals to determine if their pain problems are real. 

In Illinois, saving money on marijuana taxes is as simple as getting a physician to write a recommendation. From there, a person must pay an application fee of between $100 to $250 and they can begin shopping for marijuana on the receipt while they wait for their card to arrive in the mail.

Not every legal marijuana state has this type of grey area that allows patrons to avoid high taxes by joining the medicinal sector. But it might be an option worth exploring for some folks. In almost every state with both recreational and medicinal pot laws on the books, a lower tax rate can be had by going the medicinal route.


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