California marijuana tax cuts inches

The unpopular tax hike of California marijuana that came into effect in July is underway in the state legislature.

If signed by Gov. Gavin Newsom, Assembly Bill 564 will see the state excise tax on cannabis products recover to 15% on October 1.

This is still too high for many cannabis industry players and advocates, and is taxed higher than other states with higher tax rates.

But any cuts are a welcome development for California’s struggling industry.

According to legislative records, the state legislature signed on the latest amendment to the state Senate.

Observers told Observers that the entire legislature is expected to send tax bills to Newsom’s desk for approval in the next few days. mjbizdaily.

Written by Matt Haney, a convention raiser for the San Francisco Democrats, AB564 will not lock in the 15% GST rate until at least May 1, 2028.

At the time, state officials could recommend further adjustments – including many in the California cannabis industry seeking tax cuts.

Observers say Newsom supports tax cuts on marijuana

California’s excise tax increased to 19% from July 1 as the 2022 arrangement eliminates state farming taxes.

Many lawmakers, with Newsom’s support, tried to freeze taxes into the budget bill in late June.

However, the effort failed, partly due to opposition from top Senate members.

The bill would require state officials to “report the estimated gains or losses in the cannabis excise tax revenue generated by the bill’s provisions and discover and announce the specific goal of the bill’s reduction is to provide immediate tax relief for the cannabis industry.”

As Haney observed, the number of active marijuana licenses in the state fell 18% in 2024 and sales fell 4.4%.

This is often attributed to consumers who are seeking cheaper, tax-free marijuana in the illicit market.

California Legal Cannabis Sales Trail, Missouri Michigan

In a statement from Haney’s office, the bill’s legislative plan included: “California only sells per capita in other states (Oregon, Missouri, Oregon, Michigan).”

According to state data, annual sales in 2024 are about $4.1 billion.

It is estimated that only 40% of cannabis consumed in California are purchased from retail dispensaries.

“If California is comparable to states like Michigan, it will generate $13 billion in annual sales, and the state will receive more tax revenue,” the author statement added.