California is increasing pot business taxes in the legal market, shocking the state’s struggling marijuana companies.

Hefty marijuana taxes that can approach 50 percent in some communities have been blamed for sending shoppers into the tax-free illegal market, which is thriving.

Beginning Jan. 1, legal pot shops will have to shell out more to the state on the inventory they purchase from distributors.

"It will definitely cause a problem for us," said Tommy Pawloski, the manager of All about Wellness in midtown Sacramento. "It will cause a problem for the prices and increase prices for the consumers."

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Walter Makaula ~ KCRA.com