NORML: California: Governor Signs Legislation Reducing Cannabis Tax Burden

Sacramento, CA: Democratic Gov. Gavin Newsom signed budget legislation late last week that reduces various marijuana-specific taxes.

Specifically, the legislation eliminates the cultivation tax on licensed growers and caps any further increase in the excise tax for three years, among other changes.

According to an economic analysis published this spring by The Reason Foundation, regulatory costs, high taxes, and municipal bans on cannabis retailers have significantly inhibited the growth of the licensed marijuana marketplace in California. The analysis estimated that California imposes an effective tax rate of as much as $92 per ounce. This amount is higher than the tax burden imposed on retail cannabis transactions in other states.

California NORML Director Dale Gieringer, who authored the study’s forward, recommended at that time that lawmakers impose “substantive tax cuts” in order to “reduce demand for the illicit market, while still retaining reasonable revenues” for state-licensed retailers. Following last week’s bill signing, he added, “The budget bill is a helpful start, but much more needs to be done to make legal cannabis more readily accessible to consumers who now rely on the unregulated market.”

California: Governor Signs Legislation Reducing Cannabis Tax Burden

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