California lawmakers start push to lower state marijuana taxes

In a bid to combat black-market operators, two California state lawmakers have introduced a measure to lower the cannabis tax rate for three years, which should in turn lower the prices retailers charge for legal products.

“We need to give legal businesses some temporary tax relief so they do not continue to be undercut by the black market,” Assemblyman Tom Lackey, a Republican from Southern California, said in a statement.

Lackey is co-sponsoring the tax measure with Oakland Democrat Rob Bonta. Three other Democratic lawmakers helped write it.

The bill would drop the state excise tax on cannabis products to 11% from 15% for three years, until June 2021. It would also suspend the cultivation tax that growers now pay.

The measure – technically an amendment to an existing bill, AB 3157 – would in effect cut the prices that consumers pay for medical and recreational products by roughly 9%, based on analysis by New Frontier Data, according to a news release from Lackey’ office.

In addition to the existing 15% excise tax, the state’s current marijuana tax structure includes a cultivation tax of $9.25 per ounce of cannabis flower or $2.75 per ounce of leaves. The cultivation tax translates to $148 per pound.

Add on local taxes, and the cumulative tax rate for many California consumers can be as high as 45% in some parts of the state, according to the Fitch Ratings agency.

The bill “reduces the tax burden on the licensed cannabis market during this transition period, keeping customers at licensed stores and helping ensure the regulated market survives and thrives,” Bonta said in the release.

3 comments on “California lawmakers start push to lower state marijuana taxes
  1. Pat on

    [ The bill “reduces the tax burden on the licensed cannabis market during this transition period, keeping customers at licensed stores and helping ensure the regulated market survives and thrives,” Bonta said in the release. ]

    This statement coming from one of the ca. state legislature’s assemblymen that was pivitol in creating the worst cannabis law in the nation. Instead of someone else coming in and completely restructuring this broken law; the best ca. can get, is this. And, these guys call this work. Yeah. This will fix it. Bill Cosby:

    “RIIIIIIIIIIGHT!”

    This is a “pretend fix.” Another abuse of our tax dollars.

    Reply
  2. Bob on

    California needs to make it so county’s can’t charge unreasonable fees for licences.
    I just want to have a small seed co but can’t afford the fees to start in my county it’s $17500
    To run a a small time business that would only make a small fraction of that.
    It’s either be a big time grower or nothing. It will be corporate only soon. No mom and pop shops.

    Reply

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