Cannabis advocates have voiced their support for this new legislation. Html” target=” blank”> told the Los Angeles Times. “Right now, thousands of California businesses are struggling with one-time costs of regulatory compliance. These businesses are at a significant disadvantage to unregulated operators who are continuing to operate in the unregulated market and are not incurring their costs. “Lowering the tax rate on cannabis will encourage cannabis businesses to choose the legal market, which helps the entire industry and protects our members’ jobs.
California Lawmakers Propose Reducing Cannabis Taxes to Compete With Black Market – News
Photo State officials are hopeful that these cultivators will eventually transition to the legal market, but these growers are having no trouble selling their crop illegally. Not only is there money to be made in shipping marijuana to states where pot is still prohibited, but California stoners are still buying black market bud because it is significantly cheaper than the taxed legal alternative. Black market sellers are able to offer weed without this significant upcharge, and can also afford to cut prices even lower because they can avoid the licensing and regulatory fees required to sell weed legally. Html” target=” blank”> temporarily lowering the sales tax rate on cannabis in order to help the fledgling legal market compete with cheap, unregulated black market grass. A new bill, proposed by legislators Tom Lackey and Rob Bonta, would lower the state excise tax from 15% to 11% and suspend the cultivation tax. The bill would only lower these taxes for three years, which legislators hope is time enough for the legal industry to get on its feet. “We need to give legal businesses some temporary tax relief so they do not continue to be undercut by the black market. ” Assemblyman Bonta said that the new bill would reduce “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. “