California lawmakers have announced a bill that would reduce cannabis excise taxes and eliminate cultivation taxes, The Sacramento Bee reports.
Assembly Bill 286, if approved, would reduce the excise tax on cannabis goods from 15 percent to 11 percent. A three-year cultivation tax for growers would also be completely eliminated.
“Those good businesses, those good actors, are not able to compete with the black market product if they cannot be competitive on price and cost.” — Assemblyman Rob Bonta, co-sponsor of the bill, via the Sacramento Bee
California’s cannabis customers sometimes pay taxes accounting for up to 45 percent of the actual cost of the product, according to reports by industry analysts. On top of the taxes that may be adjusted by this bill, there are also local taxes, which can be considerable.
California tax income from has been below projections, largely because a majority of citizens continue to purchase their cannabis from the illicit market due to the high cost of legal cannabis products. Industry members have complained to the state on several occasions about the high taxes.
California state Treasurer Fiona Ma said, “We don’t tax start-up businesses [in other industries] when they start. We need to do better. This is anywhere from a $6 billion to $20 billion industry here in California.”
Get daily cannabis business news updates. Subscribe
End
