California Assembly Unanimously Passes Bill To Delay Marijuana Tax Hike For Five Years

The California Assembly has unanimously approved a bill to delay the
implementation of an planned hike on marijuana taxes.

About a month after state officials announced that the cannabis excise tax
rate would increase from 15 percent to 19 percent on July 1, the Assembly
voted 74-0 to pass legislation from Assemblymember Matt Haney (D) to delay
the change for five years.

The bill now goes to the Senate for consideration, but advocates are hoping
to see its language incorporated into a separate budget trailer measure
that would take effect upon enactment—as opposed to at the beginning of
next year as would be the case under Haney’s bill.

While the legislation as introduced would have outright repealed the
proposed tax hike, it’s since been amended to delay its implementation
until the 2030-2031 fiscal year.

The United Food and Commercial Workers (UFCW) officials applauded the
Assembly’s vote.

Joe Duffle, president of UFCW Local 1167, said raising the tax rate would
“only increase the number of failed legal cannabis businesses” in the state.

“AB 564 freezes the cannabis excise tax at 15 percent and gives legal
cannabis businesses a fighting chance to stay afloat in an industry that is
contracting every day,” he said. “Without this bill, the illicit cannabis
industry will only flourish more and keep putting untested, untaxed and
unregulated cannabis products into the hands of consumers.”

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Under the legislation, the California Department of Tax and Fee
Administration (CDTFA), working with the Department of Finance, would be
required to “adjust the cannabis excise tax rate upon purchasers of
cannabis or cannabis products” based on the “additional percentage of the
gross receipts of any retail sale by a cannabis retailer that the
department estimates will generate an amount of revenue equivalent to the
amount that would have been collected in the previous fiscal year,” the
bill text says.

The department would need to “estimate the amount of revenue that would
have been collected in the previous fiscal year pursuant to the
weight-based cultivation tax” and “estimate this amount by projecting the
revenue from weight-based cultivation taxes that would have been collected
in the previous calendar year based on information available to the
department.”

“The specific goal of the cannabis excise tax rate reduction is to provide
immediate tax relief to the cannabis industry,” the measure states. “The
efficacy of this goal may be measured by the Legislature by the amount of
gain or loss in cannabis excise tax revenues resulting from the cannabis
excise tax rate reduction allowed by this act.”

It also mandates that CDTFA, on or before December 1, 2026 and each
subsequent year the California “submit a report to the
Legislature…detailing the amount of gain or loss in cannabis excise tax
revenues resulting from the cannabis excise tax rate reduction allowed by
this act.”


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Meanwhile, California officials last month awarded another round of
community reinvestment grants to nonprofits and local health departments,
funded by marijuana tax revenue.

California’s Supreme Court separately delivered a victory for the state’s
marijuana program last month, rescinding a lower court ruling in a case
that suggested federal prohibition could be used locally to undermine the
cannabis market.

The state Supreme Court ruling also came just weeks after California
officials unveiled a report on the current status and future of the state’s
marijuana market—with independent analysts hired by regulators concluding
that the federal prohibition on cannabis that prevents interstate commerce
is meaningfully bolstering the illicit market.

Gov. Gavin Newsom (D) did sign a bill in 2022 that would have empowered him
to enter into interstate cannabis commerce agreements with other legal
states, but that power was incumbent upon federal guidance or an assessment
from the state attorney general that sanctioned such activity.

Meanwhile, a California Senate committee recently declined to advance a
bipartisan bill that would have created a psilocybin pilot program for
military veterans and former first responders.

Texas Lawmakers Pass Ibogaine Bill That Gives State A Commercial Stake In
Psychedelic Intellectual Property

*Photo courtesy of Philip Steffan.*

The post California Assembly Unanimously Passes Bill To Delay Marijuana Tax
Hike For Five Years appeared first on Marijuana Moment.