With the help of a numerical example, explain why California and Maine tax cannabis by weight rather than by price. Excellent explanation of why California and Maine tax cannabis by weight instead of price, with reference to a numerical example. “Because states generally set their cannabis tax rates as a percentage of price, their revenue per sale sinks in direct proportion to the fall in cannabis prices...” When considering the possibility of legalizing the recreational use of cannabis, had the state governments of California and Maine already anticipated the price decline for cannabis after legalization? If yes, should the state governments of California and Maine choose the tax-per-price scheme or the tax-per-weight scheme?
With the help of a numerical example, explain why California and Maine tax cannabis by weight rather than by
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