California’s much-hyped, year-old marijuana industry fell woefully short of expectations in 2018 and industry leaders blame their inability to compete with the state’s robust black market, which doesn’t pay the taxes and navigate the red tape they do.
Several lawmakers proposed to slash taxes as a way to jump start California’s legal marijuana marketplace.
“Excessive taxation hurts legal businesses and consumers while spurring the illegal market,” said Michael Ray, chief executive of cannabis company Bloom Farms. “Lowering taxes is a step in the right direction towards growth in the legal market here in California.”
California officials said the state collected $234 million in taxes between January and October last year, the latest figures California Department of Tax and Fee Administration has available. Gov. Gavin Newsom’s proposed budget for the fiscal year that ends June 30 estimates $355 million in annual tax revenues, a $275 million reduction from previous estimates.
Democrat Assemblyman Rob Bonta of Oakland proposed to temporarily reduce the 15 percent tax consumers pay at the retail counter to 11 percent and eliminate the $148 per pound of pot farmers pay for three years. Bonta said the state’s legal marijuana industry is “not occurring as we hoped, expected and wanted.” The proposal if passed would not lower county and city taxes, some of which are high than the state’s rates.
The legal pot industry said the tax proposal was a good start, but that onerous and costly regulations are also enticing growers and sellers to skip licensing and remain selling marijuana illegally.
https://apnews.com/2a022328c0a04356be4cbc7c5a8a9f64
Several lawmakers proposed to slash taxes as a way to jump start California’s legal marijuana marketplace.
“Excessive taxation hurts legal businesses and consumers while spurring the illegal market,” said Michael Ray, chief executive of cannabis company Bloom Farms. “Lowering taxes is a step in the right direction towards growth in the legal market here in California.”
California officials said the state collected $234 million in taxes between January and October last year, the latest figures California Department of Tax and Fee Administration has available. Gov. Gavin Newsom’s proposed budget for the fiscal year that ends June 30 estimates $355 million in annual tax revenues, a $275 million reduction from previous estimates.
Democrat Assemblyman Rob Bonta of Oakland proposed to temporarily reduce the 15 percent tax consumers pay at the retail counter to 11 percent and eliminate the $148 per pound of pot farmers pay for three years. Bonta said the state’s legal marijuana industry is “not occurring as we hoped, expected and wanted.” The proposal if passed would not lower county and city taxes, some of which are high than the state’s rates.
The legal pot industry said the tax proposal was a good start, but that onerous and costly regulations are also enticing growers and sellers to skip licensing and remain selling marijuana illegally.
https://apnews.com/2a022328c0a04356be4cbc7c5a8a9f64
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