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Cannabis Businesspeople Rush to Bible Belt to Avoid High Taxes

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While the states on the Pacific Coast such as California, Washington and Oregon are typically known for legalizing cannabis, high taxes are causing cannabis businesspeople to move to states like Oklahoma in the Bible Belt. Oklahoma’s lack of a cap on the number of dispensary licenses and low, red-state taxes make it an ideal spot to open up for business.

“Oklahoma is really allowing for normal people to get into the cannabis industry, as opposed to other places where you need $20 million up front,” farmer Jessica Baker told the Associated Press. Baker and her husband Chip run a cannabis farm about 40 miles outside of Oklahoma City. They deserted Northern California, where they lived for about 20 years, to seek lower taxes in Oklahoma.

Surges in the neighboring states of Arkansas and Louisiana are also evident, however medical cannabis in those states is much more restricted than in Oklahoma. In Louisiana, for instance, only nine dispensaries are licensed to dispense cannabis.

But the tax rates in western states continue to drive cannabis entrepreneurs eastward into the region of the Bible Belt. In California, licenses can run up to $300,000 per year, not including the application fee, the surety bond and other fees. According to analysts, taxes on cannabis in California can approach 50 percent once the state and local taxes are tallied up.

“Some of these states are regulating cannabis like plutonium,” said Morgan Fox, a spokesman for the National Cannabis Industry Association, the national trade group for marijuana businesses. “And the financial burdens that are placed on licensed businesses are so onerous, that not only is it very difficult to stay in business, but it’s also very difficult for the legal, state-regulated systems to compete with the illicit market.”

In Oklahoma, a dispensary license costs much less, running at $2,500, and the approval process is much quicker. Some experts also estimate that Oklahoma dispensaries are catering to as many as 15 percent of their clientele from neighboring states in the Bible Belt.

 

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