Lawmakers in California have introduced legislation to temporarily reduce taxes on the state’s recreational cannabis industry in order to help the sector compete with the illicit market, according to a report from Reuters. The measure was introduced by Republican Tom Lackey and Rob Bonta, a Democrat, who said the bill is directed at “keeping customers at licensed stores and helping ensure the regulated market survives and thrives.”
“California cannabis businesses are making significant investments as they embrace the regulated marketplace while, at the same time, being undercut by unregulated competitors.” – Bonta, in a statement, to Reuters
The measure would suspend the $148-per-pound tax on cultivation and reduce the excise tax on sales from 15 percent to 11 percent. The relief would expire in June 2021.
“We need to give legal businesses some temporary tax relief so they do not continue to be undercut.” – Lackey to Reuters
The measure has not yet been referred to an Assembly policy committee, which would need to approve it before putting to the floor to a vote. It would also need to be cleared by the state Senate. Under the current tax regime, the California cannabis industry is expected to generate at least $1 billion per year in tax revenue.