California considers cut in Marijuana Taxes

Posted by Sagar Satapathy on March 25, 2018.

As California cannabis businesses rush to get in line with new rules, state lawmakers have proposed a measure that would cut the tax rate on marijuana purchases in the state.

The new proposal would drop the state excise tax on cannabis to 11% from the current 15% and suspend all cultivation taxes on marijuana, until June 2021.

The bill was introduced on Thursday by Assembly members Tom Lackey, R-Palmdale, and Rob Bonta, D-Oakland, along with three Democratic co-authors, with a view to reduce the price gap between licensed cannabis businesses and black market sources.

The Democratic Assembly members who supported the y Bill 3157 include Ken Cooley, D-Sacramento; Reggie Jones-Sawyer Sr., D-Los Angeles; and Jim Wood, D-Healdsburg.

In a statement, Lackey highlighted the pressure that legal businesses faced compared to their off-the-books competition.

“Criminals do not pay taxes, ensure customers are 21 and over, obtain licenses or follow product safety regulations," he said. "We need to give legal businesses some temporary tax relief so they do not continue to be undercut by the black market.”

Assemblyman Bonta said that the new bill would reduce “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.”

Currently, California imposes a 15 % tax on marijuana sales, and local governments are allowed to add on their own rates as well. The state also imposes a separate tax on cannabis cultivators based on the amount they produce. All of these taxes add up to greatly increase the price of marijuana, which is turning customers away. 

California legalizes the possession and purchase of up to an ounce of marijuana for recreational purpose and allows individuals to grow up to six plants for personal use.

comments powered by Disqus