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Cheech & Chong could have done a better job with legalizing marijuana than tax addicts in Sacramento
Dennis Wyatt 2022
Dennis Wyatt

The Berkeley Barb. The Summer of Love. Marijuana.

Back in 1967 if someone had told you that a judge would one day be presiding over a case where a “pot head” was suing a “dealer” for false advertising you’d be wondering if they were talking about a Cheech & Chong skit.

It’s 2023 and —as Rod Serling would say — “you’ve just crossed over into The Twilight Zone”.

Blake Wilson of Fresno and Jasper Centeno of Long Beach several months ago filed a class action lawsuit in Los Angeles County Superior Court.

They’re suing DreamField Brands for false advertising.

DreamField Brands is a purveyor of legally grown marijuana.

The beef is that the firm’s pre-rolled joints marketed under the name “Jeeter” is advertising its THC content much higher than it actual delivers.

THC is shorthand for the chemical responsible for most of the psychological effects of marijuana.

Without getting too far into the weeds — pun intended — Wilson and Centeno contend some of the Jeeter products they have purchased and had tested at an independent lab had THC content between 23% and 27% instead of being as high as 40% as product labels indicated.

 The class action lawsuit has to be a first.

It also underscores a brave new world of litigation we’re drilling down into as a society

How many liquor and beer buyers do you think have cans of Coors or bottles of Absolut Vodka, for example, tested at an independent lab to make sure the percentage of alcohol on the label was correct?

Or do you know of any Marlboro “men” or Virginia Slims “babies” that have filed lawsuit because tar and nicotine levels in their cigarettes were lower than what they were led to believe?

A Johnny-Come-Lately to the mass market of legal products designed to give you a buzz or “calm” you down has landed as a defendant in a court system that for decades has been attuned to deciding whether people were breaking the law by being in possession of marijuana. Now judges are being asked to rule to make sure marijuana is giving its users a high enough buzz.

You can’t make this stuff up.

The lawsuit states the plaintiffs were “misled and harmed” by incorrect labels. That is why they are accusing DreamField Brands of false advertising, negligent representation, and unfair competition.

As such they want damages, restitution, attorney fees and an injunction against DreamField Brands.

Bet those running organized gangs selling marijuana don’t have attorneys on retainer to defend them against product satisfaction lawsuits.

Nor do they have to worry about taxes.

Operating outside the law means lawsuits, government inspectors, and other nuances like minimum wage laws, overtime rules, workmen’s comp, toxic free workplaces, and mandatory health insurance aren’t a concern.

So why — one must ask — did  the Sacramento powers sell the proverbial bill of goods in 2016 when voters embraced the ballot measure that allowing the cultivation, sale, and possession of marijuana for recreational uses by promising it would bury the state treasury under endless tax revenue?

Since 2016, legal California marijuana sales have brought in $4 billion in state tax revenues plus add-on local taxes as well.

But at the same time the black market has grown even bigger with experts placing annual ill-gotten gains at $8 billion in 2021. That’s $8 billion a year California is not getting a penny from.

Worse yet, stepped up black market marijuana sales has increased violent criminal activity.

A prime example is the promised land of illegal marijuana grows in the Emerald Triangle composed of Humboldt, Mariposa, and Trinity counties in northwest California. Illegal grows and the crime they bring flourish against  county law enforcement agencies that have less than three dozen officers apiece.

Why assume the risks of importing marijuana from Mexico when you can grow it at even less risk in California to then distribute across the country?

Illegal grows also raise havoc with the environment when it comes to toxic chemical contaminations, hijacking and polluting limited water supplies, and clear cutting wilderness to create marijuana patches.

In 2021 alone, 949,000 illegal marijuana plants were seized by law enforcement within the boundaries of national parks including Death Valley.

By taking away a government barrier to legal marijuana use for recreational purposes and then taxing to death legal well-regulated grows before the industry was even born what other result did anyone expect?

Legal marijuana is regulated and tracked from seed to customer to protect against toxic chemicals as well as to make sure every marijuana plant and its byproducts are taxed.

In California, growers pay taxes of $9.25 per ounce of flowers and $2.75 per ounce for leaves.

The permits needed to had on an annual basis to legally grow marijuana comes to right around $100,000.

Then there is sales tax and what other additional taxes local jurisdictions opt to pile on,

But that’s not what really is crippling legitimate entrepreneurs. Unlike other businesses, legal marijuana growers in California can’t take advantage of a slew of businesses-related deductions or access tax credit as an incentive to modernize or expand production.

Even cigarettes — scorned by many as America’s most evil corporations and purveyors of death  — can take advantage of federal deductions and tax credits.

Because California’s legal marijuana industry can’t, a United States Senate Finance Committee report indicated such legal pot growing ventures have an effective tax rate of 80 percent as opposed to the federal tax rate of 21 percent other businesses have before various deductions lower their tax liability.

If Elon Musk had to play by the rules that legal marijuana growers in California do, he wouldn’t be able to make money selling battery operated RC race car toys.

Imagine what would have happened if legal marijuana growing in California had been primarily structured to assure the health and safety of the end users instead of being maximized as a tax cow.

Universal tax obligations along with enough fees to cover the heightened regulation and oversight would make doing business in California more viable.

The end result would be lower consumer prices and less incentive for most users to buy on the black market.

That won’t happen, however, until the California Legislature et al admits it has a serous addiction.

They need to practice moderation to bring its ill effects under control.

Sacramento’s drug of choice? Taxes.