The California government signals tax reform as the marijuana industry struggles with state regulations

By Nina Zdinjak

California Governor Gavin Newsom is finally considering cannabis tax reform to prevent a possible industry rebellion and / or the collapse of the state’s legal marijuana market, The Sacramento Bee reported.

This week Newsom tabled a budget proposal revealing that it “supports cannabis tax reform and plans to work with lawmakers to make changes to California’s cannabis tax policy to stabilize the market.”

Photo by Nikolay Ponomarenko / Getty Images

The governor’s budget estimates California could generate $ 787 million in marijuana revenue in the 2022-23 tax year. Of that amount, nearly $ 595 million will be earmarked for youth drug abuse treatment, the eradication of the illegal cultivation of cannabis, and support for public safety-related activities.

Newsom said he will try to “get these communities to become aware of the opportunities to get rid of the illegal market and the illegal market and provide support and a regulatory framework for the legal market”.

Cannabis Industry Delighted

Elizabeth Ashford, vice president of communications for cannabis delivery company Eaze, welcomed this important industry news.

“I think Governor Newsom knows and his advisors know they can’t let the legal market fail,” said Ashford, who previously worked for Govs. Jerry Brown and Arnold Schwarzenegger. “It is extremely important that the steps that the state government can take are taken. You have to take these steps. “

Ashford stressed that the legal marijuana industry was being seriously jeopardized by widespread illegal cannabis sales and confusing local regulations.

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“This is a complex, important ecosystem for job creation in the state. So when we say that the legal market may be in an existential crisis, we are talking about thousands and thousands of jobs and also millions of income. “

Michael Steinmetz, the founder of Flow Cannabis Co., which makes Flow Kana, said he was also thrilled to hear Newsom announced a tax reform on cannabis. In November, Steinmetz threatened to withhold his taxes until the governor and state legislature committed to adjusting marijuana regulations after July 1, 2022. He is also part of a group of cannabis entrepreneurs and advocates planning rallies at the Capitol – one scheduled for Thursday January 13 and another on January 26.

RELATED: Are High Government Marijuana Taxes Really Causing the Persistent Black Market?

“We are grateful that the governor heard the cries of large and small business owners, farmers, employees, patients and consumers about the dire state of legal cannabis in California,” Steinmetz said in an email. “We now ask the legislature that you, too, hear our cries and join us on January 13th and 26th as we share our stories on the steps of the Sacramento Capitol.”

This article originally appeared on Benzinga and was republished with permission.