Rodney Holcombe of LeafLink argues that excessive cannabis taxes drive consumers to the illicit market, undermine legal businesses, and ultimately reduce state tax revenue. Using data from states like California and Michigan, the op-ed suggests that simpler, lower tax structures are necessary for a functional and sustainable legal industry.

High Taxes Are Killing the Vibe: Why Heavy Levies Are Pushing Tokers Back to the Illicit Market

Mar 30, 2026

Source:

Marijuana Moment

While many outsiders assume the legal cannabis industry is a gold mine, those of us on the ground know the reality is much more complicated—mostly due to the staggering tax rates that vary wildly from state to state. A recent op-ed by Rodney Holcombe of LeafLink sheds light on a growing problem: lawmakers often view legal weed as a bottomless piggy bank, but over-taxing is actually choking the life out of the legal market.

The central issue is that high taxes don't actually stop people from wanting to get high; they just influence where people decide to shop. When you stack state excise taxes, sales taxes, local levies, and sometimes even "potency taxes" based on THC content, the final price at the register can become impossible for many everyday tokers to justify. In states like Illinois or Washington, these combined costs can hike the price by over 40%. For the average consumer, that extra twenty bucks on an ounce is the difference between supporting a local dispensary and calling up an old-school delivery service that doesn't charge for compliance and testing.

This matters because a healthy legal market depends on accessibility. When taxes are sensible, it’s easier for small, craft growers to stay in business and for consumers to access lab-tested, safe products. However, when states like Michigan or California hike rates to fill budget gaps, they often see a counterproductive drop in revenue as shoppers migrate back to the illicit market.

For the savvy shopper, these trends are a reminder to look for dispensaries that offer loyalty programs or "out-the-door" pricing, where the tax is already included in the displayed price. It’s also a great time to engage with local advocacy groups. Letting your representatives know that you want a fair, sustainable market—not one treated like an ATM—helps ensure that our community can continue to thrive. We all want legalization to succeed, but for that to happen, the price has to stay right for the people.