U.S. - California bill would slash pot taxes as legal industry struggles

[S.J.B.]

California proposes slashing pot taxes to help regulated industry compete with black market
Jeff Daniels
CNBC
January 28th, 2019

A bill was introduced Monday in the California legislature that would give legal cannabis businesses a tax break to help them thrive and better compete with the underground market.

Assembly Bill 286, dubbed the Temporary Cannabis Tax Reduction bill, would temporarily cut state excise taxes for legal marijuana retailers from 15 percent to 11 percent and also suspend cultivation taxes altogether through 2022. Supporters say the current taxes and costs that legal cannabis businesses face make for an uneven playing field with competitors from the grey and black markets.

The proposed legislation, which is sponsored by state Treasurer Fiona Ma, follows California's tax revenue for the industry coming in $101 million below projections in the first six months of 2018. State officials have blamed the shortfall on exorbitant taxes placed on the legal pot industry as well as challenges due to limited access to banking.

"We don't tax start-up businesses [from other industries] when they start," the state treasurer said. "We need to do better."

Even though at least 30 states have legalized cannabis for medical or adult use, banks and financial institutions are hesitant to provide services to cannabis businesses because federal law still considers marijuana an illegal Schedule 1 drug under the Controlled Substances Act.

Read the full story here.

 

[Felonious Monk]

Really hope they pass this. The cultivation tax is such bullshit and so unnecessary. It just complicates everything and only hurts the growers--who are the ones the state really needs to encourage to participate in the legal system (as they currently have the least incentive).

 

[AlextheKing]

Government might do this because they believe weed is harmful, at least not helpful - recreationally. Other countries tax the shit out of alcohol and cigarettes and they know people will still buy them, but its done as a deterrent to keep more people from making a habit out of it I guess.

The government should not have the right to do this though as its no ones business what harmful things we want to put in our body, except when it means those people will require more healthcare apparently.

But maybe the weed industry doesn't need to be a booming business, but I would assert that taxing the crap out of it is not an ethical thing to do.

 

[LucidSDreamr]

Fingers crossed. My edible habit is significant in cost with legal edibles

 

[Felonious Monk]

Government might do this because they believe weed is harmful, at least not helpful - recreationally. Other countries tax the shit out of alcohol and cigarettes and they know people will still buy them, but its done as a deterrent to keep more people from making a habit out of it I guess.

The government should not have the right to do this though as its no ones business what harmful things we want to put in our body, except when it means those people will require more healthcare apparently.

But maybe the weed industry doesn't need to be a booming business, but I would assert that taxing the crap out of it is not an ethical thing to do.

It's not the government, the taxes were specified in the proposition that voters directly voted on. High taxes were put in by big money morons like Shaun Parker who made a lot of compromises for no reason to help passage of the initiative.