When it comes to cannabis ballot measures, a common promise is made to voters that the increased tax revenue from cannabis sales will go back into the community. Cannabis taxes are therefore unavoidable. So is the debate over how high those taxes should be. In turn, all states have their fair share of cannabis tax headaches. However, California stood alone on that front for years where the state could not get its act together to amend its draconian cannabis tax laws. That all just changed though. Let’s look at what happened.
Governor’s Cannabis Tax Proposal
Here’s a decent summary of California’s former cannabis tax situation. SB 1074 never moved out of the Senate. Back in May though, Governor Gavin Newsom gave some hope to operators when he announced his proposal to eliminate the current cultivation tax. Under Newsom’s proposal, to make up for that lost cultivation tax revenue, the state would raise the retail excise tax from 15% to 19% after three years, with some exceptions for a more immediate increase depending on industry revenue generation. Newsom’s proposal also shifts the tax collection burden from distributors to retailers starting next year. The main beef against lowering California cannabis taxes came
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