The governor of California unveiled an updated budget proposal on Friday that calls for the elimination of the state\u2019s marijuana cultivation tax and revised cannabis tax revenue allocations.<\/p>\n
Gov. Gavin Newsom\u2019s (D) May revised budget would take steps intended to combat the illicit market and make the legal industry more competitive, in large part by zeroing out the cultivation tax that marijuana businesses currently incur.<\/p>\n
It\u2019s a move that stakeholders have been pushing for, especially as businesses have struggled to keep up with rising inflation and reduced demand compared to peak coronavirus pandemic levels. The governor emphasized on Friday that he was specifically committed to exploring ways to minimize the influence of illicit growers and sellers on undercutting legal, licensed businesses.<\/p>\n
And while one might assume that removing the cultivation tax would hamper revenue streams for the state, a recent analysis<\/a> from the Reason Foundation actually found that monthly tax revenue would increase by 123 percent by 2024 if the policy change was enacted.<\/p>\n Eliminating the cultivation tax would allow farmers and licensed cannabis retailers to lower prices, making California’s legal marijuana market fare more competitive with illicit markets. https:\/\/t.co\/817c6Oj0Nr<\/a><\/p>\n \u2014 Reason Foundation (@ReasonFdn) May 13, 2022<\/a><\/p>\n<\/blockquote>\n\n The report said that ending the cultivation tax would mean lower costs for consumers and, therefore, increased legal purchases that would more than offset any revenue losses over time.<\/p>\n Newsom\u2019s proposal on its own isn\u2019t binding, however. It would need to pass the legislature with at least a two-thirds majority in order to be implemented.<\/p>\n *proposed to eliminate the cultivation tax*. <\/p>\n 2\/3 of the California Legislature has to approve this proposal so time to turn your attention, energy and advocacy to them.<\/p>\n \u2014 Nicole Elliott (@NicoleElliottCA) May 13, 2022<\/a><\/p>\n<\/blockquote>\n\n \u201cWe\u2019ve been working very closely with legislative leaders, and we\u2019ve made tremendous progress,\u201d the governor said at a briefing on Friday. \u201cWe haven\u2019t finalized any of that, so I want to be careful not to disrupt that progress.\u201d<\/p>\n Sam Rodriguez, policy director for the cannabis farmers advocacy group Good Farmers Great Neighbors, praised Newsom\u2019s move in a statement to Marijuana Moment.<\/p>\n \u201cCalifornia farmers are pleased that the governor has taken a leadership role in addressing the ills of the illicit market with a starting point on tax relief,\u201d he said. \u201cWe look forward in working the legislative budgetary process to obtain more tax relief necessary to stabilize the supply chain. The legal market in our state needs a real bootstrap approach from our state. Anything less will potentially devastate the newly created cannabis economy. And that would be a travesty.\u201d<\/p>\n The governor\u2019s revised budget proposal also includes updated estimates on tax revenue allocations for the 2022-23 fiscal year.<\/p>\n The state is expecting to distribute $401.8 million for education, youth substance misuse treatment and school retention; $133.9 million for environmental clean-up and remediation related to illicit cannabis manufacturing and $133.9 million for law enforcement purposes.<\/p>\n \u201cThese figures reflect a total increase of $74.7 million compared to the Governor\u2019s Budget estimate,\u201d the revised budget summary says<\/a>. \u201cThese estimates also reflect the proposed statutory changes to restructure the cannabis tax framework and maintain a baseline level of funding for this allocation.\u201d<\/p>\n Separately, the governor\u2019s plan would involve shifting \u201cthe point of collection and remittance for excise tax from distribution to retail on January 1, 2023,\u201d while maintaining the 15 percent excise tax rate on marijuana sales.<\/p>\n The budget further calls for the creation of a one-time \u201ccannabis local jurisdiction retail access grant program\u201d to support the development and implementation of local retail licensing efforts. The $20.5 million for that program would come out of the state general fund. Localities that license equity applicants could receive additional funding.<\/p>\n Newsom said the goal of the initiative is \u201caddressing the persistent issue that is exactly what we anticipated would be a persistent issue\u2014and that\u2019s dealing with the black market, going after the illegal growers and the illegal operators.\u201d<\/p>\n \u201cThis is beginning of a process,\u201d he said. \u201cFrom my humble perspective, in terms of my thinking, this will be a multi-year process to get that black market, get it on the retreat\u2014not the ascendancy\u2014and to get the retail and responsible adult-use market on steady ground.\u201d<\/p>\n Nicole Elliott, director of the Department of Cannabis Control, said that the budget\u2019s cannabis provisions would \u201cremove unnecessary administrative burdens and costs.\u201d<\/p>\n \u201cWe have heard from many of you who have said that the current cannabis tax framework is overly complex,\u201d she wrote in an email<\/a> to industry stakeholders. \u201cWe know that current tax policies disproportionately burden cannabis farmers and small businesses and create instability throughout the supply chain, ultimately undermining the societal benefits of a taxed and regulated market.\u201d<\/p>\n Meanwhile, California officials announced in January that the state had awarded $100 million in funding to help develop local marijuana markets<\/a>, in part by getting cannabis businesses fully licensed.<\/p>\n The state Department of Cannabis Control (DCC) distributed the funds to 17 cities and counties where there are a disproportionate number of provisional marijuana licenses, rather than full-year licenses. The department first announced that\u00a0applications for the Local Jurisdiction Assistance Grant Program had opened<\/a>\u00a0in October.<\/p>\n Also last year, the state said it was awarding about $29 million in grants to 58 nonprofit organizations, with the intent of righting the wrongs of the war on drugs<\/a>. The funding is being provided through the California Community Reinvestment Grants (CalCRG) program.<\/p>\n Grants are being awarded to qualifying nonprofits to support programs aimed at providing job placement, mental health treatment, substance misuse treatment and legal services for disproportionately impacted communities. The\u00a0program was first announced in April 2020<\/a>, and applications for those grants\u00a0were initially opened in September 2020<\/a>.<\/p>\n Officials with the California Department of Fish and Wildlife also said last year that they were\u00a0soliciting concept proposals for a cannabis tax-funded program<\/a>\u00a0aimed at helping small marijuana cultivators with environmental clean-up and restoration efforts.<\/p>\n Colorado Activists Collect Tens Of Thousands Of Signatures To Put Psychedelics Reform On Ballot<\/a><\/p>\n<\/blockquote>\n\n Photo courtesy of Chris Wallis \/\/ Side Pocket Images.<\/em><\/p>\n \u00a0<\/p>\n The post California Governor Proposes Marijuana Tax Cuts To Combat Illicit Market<\/a> appeared first on Marijuana Moment<\/a>.<\/p>\n
The governor of California unveiled an updated budget proposal on Friday that calls for the elimination of the state\u2019s marijuana cultivation tax and revised cannabis tax revenue allocations. Gov. Gavin Newsom\u2019s (D) May revised budget would take steps intended to combat the illicit market and make the legal industry moreContinue Reading<\/a><\/span><\/p>\n","protected":false},"author":458,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[18,81,126],"tags":[],"_links":{"self":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/54700"}],"collection":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/users\/458"}],"replies":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/comments?post=54700"}],"version-history":[{"count":1,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/54700\/revisions"}],"predecessor-version":[{"id":54701,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/54700\/revisions\/54701"}],"wp:attachment":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/media?parent=54700"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/categories?post=54700"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/tags?post=54700"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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\nRead More: California Governor Proposes Marijuana Tax Cuts To Combat Illicit Market<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"