You’ve probably heard the rumors that the Administration is preparing to propose language to reform the state’s cannabis tax framework. While nothing is in writing, CCIA has received a preliminary briefing on the general concepts, which include: (i) zeroing out the cultivation tax, (ii)  shifting excise tax collection and remittance to retail, and (iii) increasing the excise tax after three years to offset the elimination of the cultivation tax.

We are engaged in extensive conversations with the Legislature on behalf of our members. We are opposing any increase in the excise tax. Our position continues to be that a permanent reduction in the overall tax burden is needed to incentivize consumers to migrate to the regulated market and stabilize the industry.

We are fortunate to have open lines of communication and well-established relationships with key decision-makers in Sacramento. We are actively leveraging these to ensure the best possible outcome for businesses like yours.

In furtherance of our advocacy efforts, CCIA’s Legislative Advocate, Amy Jenkins of Precision Advocacy, and CCIA member Sam Rodriguez of Good Farmers Good Neighbors, commissioned a study on the potential impact of tax reform. This well-researched, independent report found that reducing the cannabis taxes would grow the legal market and result in more revenue for the state, not less. Since its release on May 3rd, the Study has generated excellent media coverage across California, and strengthened our negotiating position.

There are many stakeholders at the table for these conversations, including labor, youth advocacy groups, environmental groups, law enforcement, and other associations. It’s not an easy landscape to navigate, but we are working hard to find unity across the industry. We know you are too, and we appreciate the work CCIA members are doing to ensure that, together, we achieve meaningful tax reform.

While we are engaged in robust negotiations, we don’t yet know where the Administration will land. The next significant milestone is the release of the governor’s proposed May Revise of the state budget on Friday, May 13th at 10 am. We have been told that this may include additional information on the governor’s cannabis tax reform plan. We encourage you to tune in to see the livestream, which is available through the governor’s Facebook page.

Depending on the governor’s proposal, we may have reason to celebrate or we may have an urgent need to mobilize for change. We are prepared for both contingencies.

This is a pivotal moment. We will stay in close touch with you in the coming weeks as we continue the fight with you to build a thriving industry that will one day dominate the national market.