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 marijuana industry as well as challenges due to limited access to banking.