Gov. Gavin Newsom signed California’s 2022-23 state budget into law and, in doing so, enabled a significant shift in cannabis taxes that had long been sought by the industry.
The finalized budget eliminates the state marijuana cultivation tax and caps the 15% excise tax where it’s at for a minimum of three years.
Taxes have been one of the top complaints of licensed marijuana businesses in California, but until this year, attempts to roll back state tax rates had been met with defeat.
Although some suggested tax changes would have cut marijuana taxes even more drastically – such as lowering the excise tax to 5% – industry interests were able to head off a proposal to raise the excise tax instead of capping it temporarily.
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Though some in the industry are still concerned the excise tax could be raised in 2025 after the cap expires, others are celebrating the victory, the North Bay Business Journal reported.
“More work needs to be done, but I see this as a big win,” Amy Jenkins, lobbyist for the California Cannabis Industry Association, told the Business Journal.
“To critics, I say this is a significant first step.”