(This story has been updated to correct that this trailer bill needs a two-thirds vote.)
A California state budget trailer bill unveiled this week finalized language regarding cannabis tax issues that have been hotly debated for months, and it appears the industry might have scored a significant victory.
In the latest language, the trailer bill would eliminate the state marijuana cultivation tax and would maintain the current 15% excise tax for three years, according to an analysis of the measure by Hirsh Jain, a principal at Ananda Strategy in Los Angeles.
In 2026, however, the excise tax would not necessarily increase, a change in earlier proposals that had made the rounds in the California state Capitol.
Rather, under the current trailer-bill language, the Legislature could at that point revisit the issue and decide whether an adjustment is warranted, Jain said.
Also under the trailer bill, social equity cannabis companies would pay a lower excise tax rate of 12% and also receive a $10,000 tax credit.
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A trailer bill, which institutes statutory changes necessary to implement a budget, works the way other measures do. But, because this trailer bill amends Proposition 64, it requires a two-thirds vote, not the typical majority.
Prop 64 is the 2016 state ballot initiative that legalized adult-use marijuana and established a regulatory framework.