Cannabis Farmers Hope AB-1948 Leads to Tax Relief

Cannabis Farmers Hope AB-1948 Leads to Tax Relief

SF Blog writes, “California’s craft growers say that playing by the rules is forcing them out of business.” Here’s the introduction to the report The subject of taxes may seem inherently boring to some, but for Tsong and Wentzel, changing the laws dictating the cut California takes from legalized cannabis may be the difference between whether Beija Flor stays in business or not. At the center of the issue is what’s known as a cultivation tax, which essentially requires cannabis farmers in California to pay based on the dry weight of what they grow before it’s sold. Thus, instead of paying proportionally to sales, farms like Beija Flor must pay this tax for all the flower and leaves they grow regardless of what happens next. According to Tsong, this can amount to 15-20 percent of the farm’s total revenue — revenue they won’t even have until the product is sold. That’s in addition to the excise tax (calculated at 15 percent of the average market price when purchased at retail), which itself has caused the cost of cannabis to dip as retailers lower prices to combat sticker shock. “There’s basically a tax penalty to be in the cannabis business,” Tsong says, “because if you grew, say, tomatoes, you wouldn’t have to pay it.” The other folks who don’t pay it? Those operating illegally. The result is a vicious cycle that rewards larger, legal corporate farming operations that have the capital to withstand paying a high percentage of their potential earnings…

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Source : CANNANNEW REPORT
Link to original : Cannabis Farmers Hope AB-1948 Leads to Tax Relief
reposted by Cannabis News World

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