California Governor Expresses Support for Marijuana Tax Reform

High Times

California Governor Gavin Newsom indicated on Monday that he is open to making changes in the state’s taxation of the legal cannabis industry and urged local governments to allow legal cannabis companies to operate in their jurisdictions. After releasing a state budget proposal for the 2022-2023 fiscal year, the Democratic governor told reporters that regulatory changes could support California’s legal cannabis industry while curbing the illicit market. “It is my goal to look at tax policy to stabilize markets; at the same time, it’s also my goal to get these municipalities to wake up to the opportunities to get rid of the illegal market and the illicit market and provide support and a regulatory framework for the legal market,” Newsome said at a press conference on Monday, and added, “We have a lot of work to do in this space and this year I’m looking forward to working directly with the legislature on reforms.” Last month, dozens of activists and licensed cannabis operators sent a letter to Newsom warning of a potential collapse of California’s regulated cannabis industry. The group argued that high taxes are making licensed businesses unprofitable and promoting competition from illicit operators.  In the budget proposal, the Newsom administration projects that the state will collect $787 million over the 2022-2023 tax year, which represents a decrease of about $34.2 million compared to the 2021 state budget. The budget estimates that of the cannabis tax revenue raised, approximately $595 million will be available to fund substance abuse treatment, environmental remediation of illicit cannabis cultivation operations and activities related to public safety. The proposed budget notes that the Newsom administration supports cannabis reform and plans to work with the state legislature to amend California’s tax policy. The administration also plans to continue developing a grant program “that will aid…

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