California lawmakers seek tax cuts for struggling pot industry
SAN FRANCISCO (AP) —
A group of Democratic state lawmakers on Monday proposed slashing taxes to jump-start California’s sluggish legal marijuana marketplace.
Assemblyman Rob Bonta of Oakland, state Treasurer Fiona Ma and three other Assembly members said at a news conference that the state’s year-old legal marijuana marketplace is struggling to keep up with California’s entrenched black market not encumbered by state and local taxes and time-consuming and costly regulations.
Bonta said the state’s legal marijuana industry is “not occurring as we hoped, expected and wanted.”
The proposed bill would for the next three years eliminate the state’s $148 per pound cultivation tax on farmers and reduce the state’s 15 percent excise tax on retail sales to 11 percent. A similar bill failed to clear the Democratic-controlled Assembly last year.
On Jan. 1, 2018, California broadly legalized marijuana use for adults after overwhelming support for Proposition 64, which promised to fill state and local coffers while helping to eliminate the state’s illegal operators. But far fewer licenses and tax revenues have been collected than expected and legal businesses point to the state and local taxes and red tape as the reasons.
California officials said the state collected $234 million in taxes between January and October last year, the latest figures California Department of Tax and Fee Administration has available. Gov. Gavin Newsom’s proposed budget for the fiscal year that ends June 30 estimates $355 million in annual tax revenues, a $275 million reduction from previous estimates.
Legal marijuana businesses also pay local taxes not affected by the bill, which failed to pass last year.