California Gov. Gavin Newsom (D) said in a recent budget proposal that he would support reconsidering the state’s cannabis tax structure, the Sacramento Bee reports. The governor “supports cannabis tax reform and plans to work with the Legislature to make modifications to California’s cannabis tax policy to help stabilize the market,” according to his proposal.
Newsom’s revelation comes with California’s adult-use cannabis industry already up in arms about the state’s out-of-balance cannabis tax structure.
Newsom expanded on the language included the budget at a press conference, saying “there was intention by having that language in the budget,” adding that it is his “goal to look at tax policy to stabilize the market.”
Out of the $787 million of cannabis tax revenue the state will potentially collect in the 2022-2023 budget year, Newsom’s proposal allocates $595 million to youth substance abuse prevention, illegal cannabis cultivation control, and other public safety initiatives. Additionally, noting a large number of California cities and counties that have implemented cannabis bans, he would like “to get these municipalities to wake up to the opportunities to get rid of the illegal market and the illicit market and provide support and a regulatory framework for the legal market.”
“I think Gov. Newsom knows and his advisers know that they can’t let the legal market fail,” Elizabeth Ashford, vice president of communications for Eaze, said in an interview with the Bee after Newsom unveiled his budget proposal. “It’s extremely important that the steps that state government can take are taken.
“This is a complex, important job creation ecosystem in the state,” she said. “So when we talk about the legal market potentially facing an existential crisis, we’re talking about thousands and thousands of jobs and also millions in revenue.”
Get daily cannabis business news updates. Subscribe