REDDING, Calif. — "A Golden State", a cannabis retail company founded in Shasta County, is reconsidering its expansion plans in Redding following a tax increase approved by the city's council in March.
A Golden State was founded in 2018 as a high-end cannabis cultivation company, and opened their first retail store in Redding in February of 2024. However, as both a cultivator and retail operation, founder Simmon Sarraf says they're being hit from two sides by the bump in taxes.
The tax hike, intended to address a $5 million deficit, raised the gross sales tax from 5% to 6% and increased the cultivation tax from $3 to $5 per square foot.
"Our margins are so thin, we’re barely scraping by," Saraff said. "By having to be successful as an operator but then to meet the overly burdensome tax burden of 280 e, we don't have wiggle room to lower our price points, and provide a quality product to the customer."
Saraf laid out how the tax will impact their finances. Sharing the company paid Redding over $146,000 in taxes last year, just to maintain licenses, with $63,000 attributed to the Annual Cultivation Tax. This tax is now increasing by over $42,000 to $105,000 annually. Leaving A Golden State, paying just over $188,000 per year.
This does not include the Gross Sales tax hike, as he said it is impossible to judge how much they'll sell. Especially because Saraf worries the added costs could lead local cannabis operators to shut down, potentially driving consumers to the black market. He believes that the increased taxes may ultimately reduce cannabis sales tax revenue across the city as customers seek cheaper alternatives.
In February, A Golden State was enthusiastic about opening more retail locations in Redding. However, the recent tax hike has led the company to abandon those plans and consider expanding into communities like the City of Shasta Lake instead.
