LEGALIZATION, YOU’RE DOING IT WRONG: California to tax pot as much as 45%.

“High effective tax rates on California cannabis may complicate the state’s efforts to establish legal markets” said analysts Stephen Walsh and Karen Ribble in a Fitch Ratings report on California’s marijuana taxes.

California marijuana consumers are going to have to pay a combination of state and local taxes that vary by municipality. Growers and sellers have their own taxes, too.

Consumers will pay a sales tax ranging from 22.25% to 24.25%, which includes the state excise tax of 15%, and additional state and local sales taxes ranging from 7.25% to 9.25%.

Local businesses will have to pay a tax ranging from 1% to 20% of gross receipts, or $1 to $50 per square foot of marijuana plants, according to the Fitch report.

In addition, farmers will be taxed $9.25 per ounce for flower, and $2.75 per ounce for leaves.

The Fitch report says this combination of state and local taxes for consumers, retailers and growers could keep portions of California’s cannabis industry off the grid, where it has flourished for some time.

You don’t say.

The maximum effective tax rate eventually reaches zero.