Tax cuts and other reforms are coming to the California cannabis industry as authorities seek to revamp a system that businesses, growers and others say has been stymied by over-regulation.
A bill signed by Gov. Gavin Newsom last week cuts a cultivation tax placed on cannabis growers and shifts excise tax collection from distributors to retail businesses, according to the California Cannabis Industry Assn.
“While imperfect, we achieved some significant victories, which we should be proud of,” the association said in a statement.
When Californians voted in 2016 to allow the sale of recreational marijuana, advocates envisioned a system of thousands of shops and farms obtaining state licenses. Officials promised “social equity” to those hit hardest by the war on drugs.
In Los Angeles a program targeted entrepreneurs with marijuana arrest records, those with low incomes and people who lived in areas disproportionately affected by cannabis arrests.
But growth in the legal market was hampered by complex and confusing regulations, high taxes and decisions by some communities to ban cannabis shops. Industry experts and lobbyists have been fighting for reforms ever since.
The new law, AB 195, is being touted as a step in the right direction.
“CCIA has been lobbying for the elimination of the cultivation tax since it went into effect four years ago,” read the cannabis association’s statement. “Zeroing out the cultivation tax indefinitely and shifting excise tax collection from distribution to retail are big wins for our industry! We also achieved tax relief for at least three years, successfully pushed back on an automatic tax increase, which would have taken effect in 2024, bolstered enforcement against unlicensed operators, and provided additional relief for social equity operators.” [Read More @ The LA Times]