Assemblymembers Tom Lackey, R-Palmdale, and Rob Bonta, D-Oakland, announced a bill that will reduce the price disparity between legal cannabis business and black market sources. The bill will reduce existing state taxes on cannabis for three years as California implements Proposition 64 which legalized cannabis for adult-use.
“Voters have approved Proposition 64 and now it’s time for the state to carry out their will. As someone who spent 28 years in law enforcement, I know how sophisticated California’s black market for cannabis has become,” said Assemblyman Lackey. “Criminals do not pay business taxes, ensure consumers are 21 and over, obtain licenses or follow product safety regulations. We need to give legal businesses some temporary tax relief so they do not continue to be undercut by the black market.”
“California cannabis businesses are making significant investments as they embrace the regulated marketplace while, at the same time, being undercut by unregulated competitors,” said Assemblymember Rob Bonta. “AB 3157 reduces the tax burden on the licensed cannabis market during this transition period, keeping customers at licensed stores and helping ensure the regulated market survives and thrives.”
Currently legal cannabis sales include a state excise tax of 15 percent, a state cultivation tax of $9.25 per ounce of cannabis flower ($2.75 per ounce of cannabis leaf; $1.29 per ounce of fresh cannabis plant), traditional sales taxes (ranging from 7.25 percent to 9.25 percent), and local cannabis taxes which vary.
Top photo courtesy of Adobe Stock
