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California Ends Cannabis Cultivation Tax to Curb Illicit Sales

California Ends Cannabis Cultivation Tax to Curb Illicit Sales


"California Governor Gavin Newsom signed a new bill into law that will restructure the state’s adult-use cannabis program, eliminating a cannabis cultivation tax to relieve the ever-growing market prices and pivot consumers away from illicit resources.

The new law, known as AB 195, was crafted to address the government’s desire to fix a years-long problem with California’s cannabis program. AB 195, which passed with nearly unanimous support, will shift the cultivation tax currently placed on growers to a 15-percent point-of-sale excise tax that is capped at that rate for the next three years. Originally, Newsom proposed an eighteen-month cap.

“I’m celebrating,” California Cannabis Industry Association lobbyist Amy O’Gorman Jenkins told the North Bay Business Journal. “The legislature seems to have grasped a lot of what’s affecting the cannabis industry. More work needs to be done, but I see this as a big win. To critics, I say this is a significant first step.”"

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