A BREAK FOR CANNABIS COMPANIES?
A bill to lower the tax burden on California’s licensed cannabis companies is back, and has bipartisan support.
Assemblymen Rob Bonta, D-Alameda, Tom Lackey, R-Palmdale, and Ken Cooley, D-Rancho Cordova, were on-hand Friday to announce Assembly Bill 1948, the spiritual successor of last year’s Assembly Bill 286, which for three years would have eliminated the state’s cannabis cultivation tax and lowered the state’s retail excise tax from 15 percent to 11 percent.
In his remarks at a press conference announcing the bill, Bonta acknowledged that he and other lawmakers have been working on cannabis issues for years. AB 286 was held up by the Assembly Appropriations Committee last year, and a similar bill from Lackey was held in the same place in 2018.
“Sometimes, good things take time,” Bonta said.
Bonta said that AB 1948 has a strong tailwind behind it, in the form of support from bill sponsor State Treasurer Fiona Ma and a newly released Legislative Analyst’s Office report calling for a restructuring of the state’s cannabis tax system.
Gov. Gavin Newsom, too, signaled in his proposed 2020-21 budget that he is amenable to changing the tax system.
The United Cannabis Business Association, an industry trade group, issued a statement praising the bipartisan bill.
“Tax reform is one of the strongest tools that we have available to us today to combat the illicit cannabis market, which is currently three times the size of the legal industry and presents a clear public health threat to Californians who are provided easy access to untested products through unlicensed shops,” said UCBA President Jerred Kiloh. “Temporarily lowering the burden of taxation on the licensed industry will help permanently move consumers away from the dangers of the illicit market by incentivizing them to shop with legal retailers where they will have access to tested, traced and taxable products.”