Sespe Says No Price Increase Despite New State Tax

Happy 2020, Sespe Community!

We’re so grateful for the support we’ve received from the community during our first two years in business, making us one of Ventura County’s favorite dispensaries.

And we want to say thank you. 

So here’s the good news: Sespe Creek CEO Chelsea Sutula has pledged that while the state of California has increased the amount of excise tax cannabis retailers must pay for licensed cannabis products, Sespe Creek will not be raising prices in response. The advertised price on Sespe’s menu includes all taxes and will remain unchanged despite the state’s determination to squeeze even more out of cannabis consumer’s wallets.

The California Department of Tax and Fee Administration (CDFTA) evaluates the tax markup rate on cannabis every six months. Based on CDFTA analysis, effective January 1, 2020, the wholesale markup rate for cannabis retailers will be 80 percent — a dramatic increase from 2019’s 60 percent mark-up.

For example, on a typical eighth of cannabis flower the excise tax might increase from $3.12 to $3.51. At the higher end, excise tax on a luxury lotion or high potency tincture could increase from $12 to $13.50.

“We predict the cost of raising our prices and potentially alienating already cash-strapped consumers would outweigh the cost of us simply absorbing this extra tax. We would only be giving unlicensed retailers in our area that much more of an edge,” Chelsea said. “We understand the importance of access to clean, regulated cannabis, and we do not want to force our customers into the dangerous, unregulated market — so we’re taking action to protect our consumers.” 

We hope that our fellow dispensaries will make a similar commitment.