California Cannabis Taxes Cut; Prices Likely to Stay the Same

California Cannabis Taxes Cut; Prices Likely to Stay the Same
cannabis now

After years of increasingly desperate pleas for relief from burdensome California cannabis taxes that jeopardize the entire marijuana legalization experiment, the state’s cannabis industry—the oldest and still the largest marijuana market in the US—finally got something of a break in late June. However, consumers may not notice, as most California cannabis taxes remain in place. In a late-night session, as part of a package of other last-minute reforms, the California state Legislature voted to approve AB 195, a bill that would eliminate the state’s “cultivation tax.” Gov. Gavin Newsom is expected to sign the bill into law. A regressive, per-ounce, pre-sale levy on just-harvested cannabis plants that equated in some situations to a pre-sale levy of up to 77%, the cultivation tax was blamed by small craft farmers for making their product uncompetitive with the persistent illicit market—and made legal independent cannabis cultivation an unsustainable business. “It’s a good first step towards genuine reform,” said Amy Jenkins, a Sacramento, Calif.-based lobbyist who worked on passing the bill. “But there’s still a lot more work to do.” Axing the loathed cultivation tax is indeed a win, several observers told Cannabis Now. But it’s a limited win. Most businesses will still be crying out for tax and regulatory relief in a year’s time, provided they last that long.  Worse, consumers will barely notice the bill passed—if they notice at all. “Revenue Neutral” The state’s 15% excise tax will remain in place for at least another three years. And since the excise tax will now be collected at the point of sale rather than at wholesale, the amount of money collected by the state will stay roughly the same—a doctrine known in Sacramento as “revenue neutrality.” Despite an historic budget surplus of nearly $100 billion, maintaining that neutrality was paramount. No neutrality, no bill, a doctrine that Gov. Gavin Newsom’s office accepted…

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Source : California Cannabis Taxes Cut; Prices Likely to Stay the Same

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