Alarmed that California’s fledgling legal marijuana industry is being undercut by the black market, a group of lawmakers proposed Thursday to reduce state taxes for three years on growing and selling cannabis to allow licensed sellers to get on their feet.
With many California license holders claiming they can’t compete because of high state and local taxes, the new legislation would cut the state excise tax from 15% to 11% and suspend a cultivation tax that charges $148 per pound.
“Criminals do not pay business taxes, ensure consumers are 21 and over, obtain licenses or follow product safety regulations,” said Assemblyman Tom Lackey (R-Palmdale), one of five legislators pushing the bill. “We need to give legal businesses some temporary tax relief so they do not continue to be undercut by the black market.”
California voters approved the 15% tax when they passed Proposition 64 in 2016, allowing legal growing, distribution and sales of marijuana for recreational use and requiring state licenses for the continued sale of pot for medical purposes. License holders began growing and selling pot on Jan. 1.
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