About 73% of the total cannabis consumed in California is produced and sold on the black market. This means that most of the cannabis products consumed by Californians are untested and unsafe for consumption. The leaders told the state’s government that they had had enough. The government’s inaction to do anything worthwhile in the industry has pushed stakeholders to the breaking point.
Excessive taxation has crippled the industry and caused expansion opportunities to be squandered. To an outsider, California has one of the biggest cannabis industries, but it takes more information to understand that the state could have a more robust legal market. The Industry Needs Help The letter, which was co-signed by the leading officials and advocates in the state’s cannabis industry, explicitly said that the industry’s problems require the help of the state government, as these challenges are too numerous to be handled and overcome by the industry alone.
The first piece of help needed is an immediate lifting of the cultivation tax imposed on all legal cannabis growers in the state. A request for a three-year holiday from the excise tax was also listed in the letter. In addition to this, the team asks that the state government expand retail stores across the state. In a state as big as California, only one-third of its cities have cannabis dispensaries. The absence of dispensaries in two-thirds of the state’s cities can be blamed on the sluggishness of local governments in granting sales and production permits to applicants. Other Demands At a press conference to address the letter’s contents, the co-signers asked the state regulators to cancel out the mandatory 15 percent tax on cultivation and the excise tax on sales. They also pleaded that the state begins to issue more licenses to applicants so that the expansion process can begin.
Erin Mellon, the governor’s representative, said that Gov. Newsom fully supports cannabis tax reforms. She also stated that the governor agrees with the demand of the group to overhaul the system to clamp down on illegal activities within the sector. She also acknowledged that the current mandatory taxes pose severe challenges to the industry’s progress.
She ended her statement by promising that the governor is ready to work with the legislature to bring the much-needed tax reform efforts to fruition. Bottom Line The unwillingness of the state’s executive and legislative governments to effectively legislate, implement, or execute laws — and also coordinate a fully functional cannabis industry — is the root of all the problems ailing California’s cannabis industry.
These politicians and lawmakers need to immediately make good on their pledges to wipe off the state’s cannabis black market. Honestly, it makes no sense that a state’s bootleg cannabis market is at least twice the size of its legal market.
The faster these issues are resolved, the earlier operators in the legal sector can begin making their deserved profits while making the industry the most robust legal cannabis industry in the United States.
This article originally appeared on Cannabis.net and has been reposted with permission.
The Fresh Toast is a daily lifestyle platform with a side of cannabis. For more information, visit www.thefreshtoast.com.