California won’t increase cannabis taxes for a year thanks to new law

Just Released! Get realistic market forecasts, state-by-state insights and benchmarks with the new 2024 MJBiz Factbook member program, now with quarterly updates. Make informed decisions.

California cannabis companies won’t see their state taxes go up until at least next year.

Gov. Gavin Newsom signed into law Assembly Bill 1872 (same language as Senate Bill 827), which prohibits the California Department of Tax and Fee Administration from adjusting the cannabis excise tax markup amount until July 1, 2021, the Modesto Bee reported.

The bill also doesn’t allow cultivation taxes from 2021 to be adjusted for inflation, unless that rate would be adjusted to less than zero.

Marijuana industry representatives in California don’t oppose the law, but some say it doesn’t do enough to alleviate the weighty tax burden on the state’s cannabis businesses, thus hindering their ability to defeat their toughest competition: the illicit market.