California gov moves to simplify cannabis regulatory, tax systems

California Gov. Gavin Newsom’s administration on Friday announced plans to simplify the state’s cannabis regulatory and tax systems, which have been blamed for enabling an illicit market to continue to thrive.

The proposed changes, which will be in Newsom’s state budget proposal, come in the wake of recommendations by an independent agency that the state overhaul its cannabis tax regime.

Newsom’s plan include consolidating the current three licensing entities – the Bureau of Cannabis Control, the Department of Food and Agriculture, and the Department of Public Health – into a single Department of Cannabis Control by July 2021.

His administration also proposed changes designed to reduce the tax-collection burden on the cannabis industry and simplify the tax-collection process.

Those changes would include moving the responsibility for the cultivation excise tax from the final distributor to the first and the retail excise tax from the distributor to the retailer.

Newsom’s administration said that, in consultation with the industry and stakeholders, it also will consider changes to the existing cannabis tax rates and the number of taxes.

The United Cannabis Business Association (UCBA) praised the move.

“Since legalization, the California cannabis industry and its consumers have struggled to navigate an increasingly complex regulatory landscape – a situation that contributed to the growth of the illicit market and the current accessibility of untested products, as well as an increased cost of compliance to license holders,” the UCBA said.

“Today’s announcement from the governor marks a turning of the tide, and we are encouraged by the efforts outlined to streamline the industry’s regulatory framework and simplify licensing and taxation.”

– Jeff Smith

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6 comments on “California gov moves to simplify cannabis regulatory, tax systems
  1. George on

    California’s unrealistic regulations are the cause for the illicit market to flourish. Of the twenty or so vendors I knew from before legalization that had attempted to comply, all have gone to the dark side. My company is ready to do the same. The BCC is responsible for this change in favor of the moneyed corporations.
    If Governor Newsom really wants to fix the chaotic mess in California, he needs to fire the BCC and look into criminal wrongdoings of the boards leadership. I would suggest that all new board members have attended and passed a Cannabis College like Oaksterdam University, or, have at least tens years of cannabis business experience.

    Reply
    • Pat on

      The gov. is completely complicit w/the current scheme. Inc. Newsom. Board members need to inc. reputable and relevant scientists, pharmacists,MD’s, industrial hygienists, public and environmental health Phd’s and so forth. Not, business people or current/ex-cartel members. Anyone, w/no formal education can get a certificate from Oaksterdam in a period of weeks..

      Reply
    • Pat on

      George you might be better off doing it. The state’s program is collapsing on itself. It’s just a matter of time. Greed and power is their operative mantra.

      Reply
  2. Oliver warders on

    This is a great move by the governor to make it simpler and easier and its a matter of time for the other states to copy this move as legalization of marijuana spreads nationwide.

    Reply
  3. Pat on

    THIS RESPONSE, RESPONDS TO EACH OF THE ARTICLE’S PARAGRAPH’S SEQUENTIALLY:

    Question: Is Newsom’s plan to simplify the reg and tax systems, or is it to make those agencies LESS visible and LESS accountable when it comes to the state’s manner of administering this program? “Simplification” doesn’t mean anything unless one describes what the simplification means; which isn’t discussed in this article. And, that’s everything.

    Some things are already known as it relates the “thriving” of the illicit market. One is, is that those that were 215/420 compliant AND wanting to conform to the next steps to greater legitimacy, were purposefully shut out of that process by the state itself. Those ( many ) whom were among the “lightest shades of grey” and operating in compliance with the laws/rules prior to 2016 all of the sudden became: black, through no fault of their own. The state ensured that they made it impossible for the vast majority of this group to become “re-complaint” overnight. The others, that never really cared about about being complaint in any manner, it’s business as usual.

    The state placed the “never-committed-a-crime” in their lives mom/pop shops; some whom had never smoked a joint prior to 215/420, into the exact same category as the ruthless, murderous cartels. Why? It doesn’t matter to the state where the saleable cannabis comes from. If it’s cutting into their profits/tax revenue; the state is willing to keep these people living in fear of prosecution and/or worse. And, as one can see by all this, how the state truly cares about the public’s health, welfare and safety around this very, very large group. However, some in this group whom were betrayed by the state have spent so much time, money and sweat equity in to their operation’s ( some for years ) were not going to let all of that go down the drain, just because an amoral and corrupt and greedy politician pulls the rug out from under them.

    What is this “Independent Agency??” That’s not defined in this article. Who/what makes up this agency? This agency apparently already exists, because it’s being referred to as an agency in this article. Why the author doesn’t publish the name of this “agency” is suspect. This omission further undermines the state’s credibility; if there was any credibility there to begin with…

    And, lest not forget, that it is been physician MD that heads up the CDPH. If these relevant agencies are “dissociated” from the cannabis realm, it will be much harder for the public to point fingers and to hold those in those specify agencies accountable for their actions/in-actions that are not in the public interest; and that actually harm the public. This act of consolidation will push these actors further into the drawer and make it harder to determine whom was responsible for what. It’s also my guess, that CDA and CDPH are LOSING money around this law. And mostly because of this, they want nothing more to do with it ( MCMRSA ).

    If Newsom wants to reduce the tax-collection burden on the industry, he can remove 95% of all the barriers to entry that are currently in place. There would be more and reasonable equitable taxation and competition.

    Really? And gouge the consumer at the point of purchase even more? Violates the basic tenants of economics. Where do you think that’s going too take the consumer? Now, you’ll be placing more consumers in harms way by forcing them into the black market. Harms way in terms of integrity of product purchased, the “dealers” the consumer may be buying from and increased potential for tangles with law enforcement because of the association. Again: Does the state care about the ca. citizenry’s public health, welfare and safety? You know the answer.

    By Newsom consulting with people and groups within the already established insular network, completely bypasses what the average citizen’s opinion would be on any of this. Newsom and his cronies are going to get the answers THEY want to hear, because it suits their interest and not the public’s. And, the utilization of this methodology is exactly how MCMRSA became the “law.”

    Of course they do. This group is probably the mastermind behind this “new approach” that makes it look like the gov. is actually doing something to make the process better, when it is actually going to hurt everyone else that’s not them ( 99.9% ).

    UCBA has to know it’s preaching to the choir. It WAS this kind of legalization and the manner in which MCMRSA has been implemented that has screwed over consumers, some existing and potential potential businesses in the first place. MCMRSA’s promulgation/implementation was meant to do just that. These special interests keep side-stepping/not discussing this fact.

    No it doesn’t. It doesn’t do anything positive. If there is any “tide turning” the announcement is to further remove accountability from the gov. around this cannabis law; and to keep moving forward with the original intention of the law’s current iteration. Again, this is mainly for the gov. to make as much tax revenue from all this, deny as much opportunity as possible to those potential businesses that have wanted to participate, and places the the ca. citizenry at more risk when it comes to their public health, environmental health and their safety. It DOES create opportunistic opportunities for some state, and private actors where they shouldn’t exist. And, all of this inopportune’s/ and or harms the ca. public. And, lastly, we never experienced these kinds of deaths prior to MCMRSA. It was all much better before MCMRSA.

    Reply
  4. Pat on

    THIS RESPONSE, RESPONDS TO EACH OF THE ARTICLE’S PARAGRAPH’S SEQUENTIALLY:

    Question: Is Newsom’s plan to simplify the reg and tax systems, or is it to make those agencies LESS visible and LESS accountable when it comes to the state’s manner of administering this program? “Simplification” doesn’t mean anything unless one describes what the simplification means; which isn’t discussed in this article. And, that’s everything.
    Some things are already known as it relates the “thriving” of the illicit market. One is, is that those that were 215/420 compliant AND wanting to conform to the next steps to greater legitimacy, were purposefully shut out of that process by the state itself. Those ( many ) whom were among the “lightest shades of grey” and operating in compliance with the laws/rules prior to 2016 all of the sudden became: black, through no fault of their own. The state ensured that they made it impossible for the vast majority of this group to become “re-complaint”, overnight. The others, that never really cared about about being complaint in any manner, it’s business as usual.

    The state placed the “never-committed-a-crime” in their lives mom/pop shops; some whom had never smoked a joint prior to 215/420, into the exact same category as the ruthless, murderous cartels. Why? It doesn’t matter to the state where the saleable cannabis comes from. If it’s cutting into their profits/tax revenue; the state is willing to keep these people living in fear of prosecution and/or worse. And, as one can see by all this, how the state truly cares about the public’s health, welfare and safety around this very, very large group. However, some in this group whom were betrayed by the state have invested so much time, money and sweat equity in to their operation’s ( some for years ) were not going to let all of that go down the drain, just because an amoral and corrupt and greedy politician pulls the rug out from under them.

    What is this “Independent Agency??” That’s not defined in this article. Who/what makes up this agency? This agency apparently already exists, because it’s being referred to as an agency in this article. Why the author doesn’t publish the name of this “agency” is suspect. This omission further undermines the state’s credibility; if there was any credibility there to begin with…

    And, lest not forget, that it has been physician MD that heads up the CDPH. If these relevant agencies are “dissociated” from the cannabis realm, it will be much harder for the public to point fingers and to hold those in those specific agencies accountable for their actions/in-actions that are not in the public interest; and that actually harm the public. This act of consolidation will push these actors further into the drawer and make it harder to determine whom was responsible for what. It’s also my guess, that CDA and CDPH are LOSING money around this law. And mostly because of this, they want nothing more to do with it ( MCMRSA ).

    If Newsom wants to reduce the tax-collection burden on the industry, he can remove 95% of all the barriers to entry that are currently in place. There would be more and reasonable equitable taxation and competition.

    Really? And gouge the consumer at the point of purchase even more? Violates the basic tenants of economics. Where do you think that’s going to take the consumer? Now, you’ll be placing even more consumers in harms way by forcing them into the black market. Harms way in terms of integrity of product purchased, the “dealers” the consumer may be buying from and increased potential for tangles with law enforcement because of the association. Again: Does the state care about the ca. citizenry’s public health, welfare and safety? You know the answer.

    By Newsom consulting with people and groups within the already established insular network, completely bypasses what the average citizen’s opinion would be on any of this. Newson and his cronies are going to get the answers THEY want to hear, because it suits their interest and not the public’s. And, the utilization of this methodology is exactly how MCMRSA became the “law.”

    Of course they do. This group ( UCBA ) is probably the mastermind behind this “new approach” that makes it look like the gov. is actually doing something to make the process better, when it is actually going to hurt everyone else that’s not them ( 99.9% ).

    UCBA has to know it’s preaching to the choir. It WAS this kind of legalization and the manner in which MCMRSA has been implemented that has screwed over consumers, some existing and potential businesses in the first place. MCMRSA’s promulgation/implementation was meant to do just that. These special interests keep side-stepping/not discussing this fact.

    No it doesn’t. It doesn’t do anything positive. If there is any “tide turning” the announcement is to further remove accountability from the gov. around this cannabis law; and to keep moving forward with the original intention of the law’s current iteration. Again, this is mainly for the gov. to make as much tax revenue from all this, deny as much opportunity as possible to those potential businesses that have wanted to participate, and places the the ca. citizenry at more risk when it comes to their public health, environmental health and their safety. It DOES create opportunistic opportunities for some state, and private actors where they shouldn’t exist. And, all of this inopportune’s/and or harms the ca. public. And, lastly, we never experienced these kinds of deaths prior to MCMRSA. It was all much better before MCMRSA.

    Reply

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