These Suggested Cannabis Tax Cuts Could Be Just What Cali Needs
It should come as no surprise that the legal marijuana industry is ‘budding,’ but without cannabis tax cuts, the Black Market will maintain its market share. With this in mind, Assemblyman Tom Lackey, R-Palmdale, some other lawmakers, and the treasurer of California State, Fiona Ma, brought new legislation forward on Monday. With this proposal, they plan to put cannabis tax cuts in place and cease the cultivation tax for the next three years.
Lackey is quoted as saying, “Right now, the illicit market is dominating California’s cannabis industry.” He went on to say, “These are bad people who are making our communities unsafe. We need to give the good guys a chance to succeed; otherwise, our one chance at creating a regulated industry will be compromised.”
With this statement, we’re given a window view of the battle pursuing between an unregulated and regulated cannabis industry, and the key to winning this war for regulation is to incorporate these cannabis tax cuts.
Prop 64 issued taxes to generate money to pay for the research, law enforcement, and other expenses associated with legalization. Following some analysis of this revenue, officials found that the taxes are not generating as much as they’d anticipated.
In fact, even before these proposed cannabis tax cuts, the cannabis tax revenue was nearly $100 million less than what was projected by Governor Jerry Brown in 2018. Throughout the fiscal year 2017-18, California collected $84 million and projects it will collect $355 million from 2018-19 and $514 million from 2019-20.
With this new bill, officials are calling for a cannabis tax cut of 4 percent for three years, dropping this number from 15 percent to 11 percent. It’s also requesting the suspension of the cultivation tax ($148 per pound) for the next three years.
These proposed cannabis tax cuts in California mimic Washington’s and Oregon’s successful implementation of reduced tax rates. And with this industry’s potential at risk of being taken by the Black Market, it’s not hard to see why it’s essential for officials to act fast with implementing these tax cuts.