California’s High Pot Taxes Will Stay Put — For Now

Legislation aimed at making legal cannabis more attractive to consumers is dead on arrival after failing to pass the Assembly Appropriations Committee Thursday.

The bill proposed by Assemblyman Rob Bonta would have lowered the 15% excise tax on marijuana to 11% and suspend marijuana cultivation taxes for 2 1/2 years.

“I'm really disappointed," said Tiffany Devitt, chief compliance officer for cannabis manufacturer and distributor CannaCraft (KTVU). We're being crushed by the black market."

That, in turn, is blowing a hole in the state’s cannabis revenue projections. Gov. Gavin Newsom's administration has downgraded marijuana tax revenue estimates by $223 million.

While local governments have received much blame for rejecting commercial cannabis businesses, taxation is also a big part of the problem.

"The taxes are so high that there is a big incentive to avoid them," explained Dale Gieringer, director of pro-marijuana group California NORML. "The black market is presently at least as large or larger as the legal market."

Bonta’s effort is likely finished for the year.


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