Gavin Newsom signs a law to delay the increase in cannabis-tranquility tax

From LatanCalmness

This story was originally published by CalmattersS Register about their ballots.

Gavard Gavin Newo on Monday signed a bill To return taxes on weeds for relaxation In an effort to alleviate a famous industry, which struggles to replace its illegal counterpart as the voters legalized marijuana almost 10 years ago.

The law will return temporarily the cannabis excise duty up to 15% by 2028 by stopping an increase to 19% employed earlier this yearS The law aims to help dispensaries that supporters say work with thin margins as they have been sunk for years of over -regulation.

“We return this increase in cannabis tax so that the legal market can continue to grow, consumers can have access to safe products, and our local communities see the benefits,” says Newsom in a statement and that a tax decrease will allow the legitimate business to remain competitive and increase its long -term growth.

The excise tax is a tax imposed by the state before the sales taxes apply. It applies to the cannabis industry under the 2022 agreement between the state and the marijuana companies. He replaced a different type of fee that had to increase revenue for social programs, such as the assistance of childcare, in accordance with the 2016 vote measure, which legalizes cannabis.

For years, the cannabis industry has been lobbying against tax, arguing that it harms the industry overshadowed by the thriving illegal drug market.

“By stopping this misconception of taxes, the governor and the legislature chose an intelligent policy that increases revenue by maintaining the legal market viable, instead of bringing consumers back to dangerous, unverified products,” said Amy O’Gorman, CEO of the California Canabis Association.

After its legalization, the weed recreation industry struggled to overtake the illegal market, as farmers flooded the industry and prices began to decrease. Taxable sales of cannabis have refused slowly From its peak in the second quarter of 2021, from over $ 1.5 billion to $ 1.2 billion four years later, according to data from the State Department of Tax and Fees Administration. Legal sales make up about 40% of all weed consumption, according to the State Department of Cannabis Control.

Several non -profit organizations that receive grants through the tax are opposed to the bill, claiming that it will threaten services for low -income children, drug abuse programs and environmental protection.

In the emerald triangle where Heartland of the industry is hiding Nestled in the northern corner of the state, the protection organizations said they were disappointed by the governor and that it was a step back to deal with the worsening of the environment caused by illegal producers in the past years.

“All this bill is a reduction in resources that we need to eliminate the damage to the illegal market,” says Alicia Haman, CEO of Friends of the Eel in Humboldt County.

Many non -profit organizations support other fees in accordance with MPs and industrial groups that the excise duty will be increased three years later, Haman said.

“She feels a little like a stab at the back,” she said.

This article was Originally Published on CalMatters and was reissued under Creative Commons Attribution-Noncommercial-Noderivatives License.