A marijuana brand named after one of the world’s most famous stoners has gone off the market California as government taxes on cannabis destroy legal operations and allow the black market to flourish.

Garcia Hand Picked, founded by relatives of Grateful Dead guitarist Jerry Garcia, moved its products and operations out of California as state laws combined with federal taxes forced legal producers to pay up to 80 percent in taxes.

How businesses leap over hurdles produce and sell marijuanablack market operations and illegal farms have managed to operate without legal barriers and undermine the efforts of legitimate markets.

The withdrawal of Garcia Hand Picked comes as experts predict many California marijuana businesses could go bankrupt as years of loss-making work to stay ahead of the rules looms.

The marijuana is sold by Garcia Hand Picked, a brand run by Jerry Garcia’s relatives

California legalized the production and sale of cannabis in 2016, but since then the path to profit has been stymied by regulatory red tape.

The required retail licenses can cost up to $100,000 a year, and businesses are taxed up to 25 percent on retail sales.

Federal law also prevents companies from deducting business taxes from federal taxes, resulting in excessive taxes paid across the board.

From 2017 to 2022, California also levied a cultivation tax on farmers based on the square footage of their farms, rather than the actual yield of their produce, allowing large corporate farms to prosper at the expense of small growers.

Since cannabis was legalized in California, the state has raised at least $4 billion Marijuana moment.

Pre-rolled seams by Garcia Hand Picked. Brand recently left California

Garcia Hand Picked Bag Filled with Marijuana. The brand is still available outside of California

Jerry Garcia’s relatives created Garcia Hand Piked. The singer died in 1995

While brands like Garcia Hand Picked struggled to comply, illegal operations were able to steal much of the California market.

By operating without the cost of regulatory fees and taxes, black market weed growers and shops have been able to sell their products at a significant discount compared to their legitimate competitors.

In the years after legalization, up to 80 percent of the marijuana sold in California was still obtained from illegal sources, according to Forbes.

Illegal storefronts operated with near impunity, as the consequences for being caught were often no more serious than misdemeanors.

Sheriff’s Department Narcotics Bureau Lt. Howard Fuchs said. Los Angeles Times that the authorities do not care about violent prosecution when the crimes are limited to the sale of cannabis.

“There’s this attitude: it’s just cannabis, we’re not going to jail people for it,” he said. “Well, you’re just saying to the legal market, ‘Good luck.’

An illegal marijuana shop in Los Angeles. Since the legalization of weed, the shops have come alive

Shoppers examine marijuana products at a legal store in California

Jerry Garcia was a born-and-bred Californian, and throughout his life became a major cultural figure in the normalization of marijuana use. For his family, starting a hemp business in California was a natural fit.

“It was a tough decision for them, they love California,” cannabis consultant Andrew DeAngelo told SFGate. “They were born and raised here. It’s very painful for them, I guarantee it.”

DeAngelo said the departure of an iconic brand like Garcia Hand Picked is a bleak sign of the times in the California market.

“You can’t make money in this market,” he said. “Not only is Garcia leaving, but so are a lot of people.”

The president of the United Cannabis Business Association, Jared Kilo, gave a gloomy forecast for the future of the cannabis market in California, saying that years of backlog of taxes and fees are coming to an end.

In the years after legalization, up to 80 percent of the marijuana sold in California was still obtained from illegal sources, according to Forbes

The president of the United Cannabis Business Association, Jared Kilo, gave a bleak forecast for the future of California’s cannabis market, arguing that the multi-year backlog of taxes and fees is nearing its peak.

“It’s probably going up fast right now because people don’t have any dollars left, there’s no light at the end of the tunnel, and nobody’s investing,” he said, according to Green market report.

Matt Yamashita, president of San Francisco distributor Grizzly Peak, gave a similar prediction in more blunt terms, saying “there’s going to be a mass extinction here soon.”

“I think in the next 12 months, half of the retailers will be open. I think 80% of the people in the business will leave. It is inevitable. The bubble will burst,” he said.