California’s tax revenue projections for the industry are projected to be $101 million below projections in the first six months of 2018. Many blame the weak numbers on the hefty taxes placed on legal pot and lack of access to proper banking. So the State Assembly is taking up the matter with a new bill that seeks to help the legal commerce compete with the underground market.
According to CNBC, “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 projections 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.’”
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