Law California

[Baron23]

I read stuff like this and all I can think or say is "FFS!!"


California marijuana tax hike puts future of legal market in spotlight amid worries over state industry’s viability

Flurries of meetings and negotiations have occurred behind the scenes in Sacramento since California announced a cannabis tax increase last month.


The stakes surrounding these discussions – all aimed at lowering the marijuana industry’s tax burden – are nothing less than the survival of the state’s legal marijuana market, according to some industry watchers.


Representatives from multiple cannabis companies and trade organizations spoke with staffers in Gov. Gavin Newsom’s office, the California Department of Tax and Fee Administration (CDTFA) and multiple state legislators with the aim of shoring up political support to lower tax burdens on legal marijuana businesses.


Among the proposals floated were:

• Asking Newsom to order the CDTFA to cancel the tax increase.
• Persuading the agency to postpone the tax hike.
• Discussing prospective legislative measures to either simplify state cannabis taxes, lower them or both.

“We’re trying everything we can,” said state Assembly Member Tom Lackey, a Republican from Palmdale who sponsored unsuccessful bills in 2018 and 2019 to temporarily lower California’s marijuana taxes.


The lawmaker sent a letter to the CDTFA after the tax increase was announced to request more information about how and why the agency calculated the increase was necessary. But, as of last week, he had received no response.


Lackey said if the tax increases announced by CDTFA are allowed to stand through 2020, it’d sound a “death knell” for California’s legal marijuana industry.


Various options


Perhaps the biggest question mark in the tax equation is what the governor will do.


Newsom spokeswoman Nicole Elliott tweeted in late November that the governor is “sympathetic to the challenges faced by legal cannabis operators” and wants to work with stakeholders.


Industry insiders said they’ve received support from the Newsom administration but no firm policy position commitment yet.


“Things are changing every day, but I’m feeling cautiously optimistic that we can get something done” on marijuana tax reform in 2020, said Amy Jenkins, lead lobbyist for the California Cannabis Industry Association (CCIA), which outlined its concerns in a recent letter to Newsom.


“There have been a lot of signals from both the administration and the Legislature that they’re committing to do that.”


But the question remains what will be done – and in a timely manner so legal businesses don’t start failing or laying off employees.


Lackey and others speculated Newsom may have the power to order the CDTFA to either delay the implementation of the tax increase or to cancel it altogether.


Perfect Union – a vertically integrated cannabis company that has dispensaries in Sacramento and Marysville – sent a letter of its own to Newsom pleading for tax relief.


“Ultimately, the governor is in charge of the CDTFA and oversees it,” said Caity Maple, vice president of government affairs for Perfect Union.


“The governor has the authority to go in and say … ‘We’ve decided as a state that we’re either going to postpone this or for now cancel this.’”


Elliott, however, said that’s not an option, and pointed to laws established by both Proposition 64, which legalized growing, selling and possessing marijuana for recreational use in California in 2016, and Senate Bill 94, which brought the state’s medical and recreational programs under one umbrella in 2017 (the Medicinal and Adult-Use Cannabis Regulation and Safety Act).


“The governor is not given carte blanche to simply ignore these legislative mandates, and it is a dangerous precedent to suggest he do so,” Elliott wrote in an email to Marijuana Business Daily.


She said the best way to address the issue is through the Legislature.


Jerred Kiloh, president of the United Cannabis Business Association (UCBA), said he’d received the same message from both the governor’s office and from talks with CDTFA Director Nick Maduros.


“(Maduros) was like, ‘The only way you can do this is through legislation.’ And that’s kind of what the governor’s office is saying, too,” Kiloh said. “We’re going to have to do legislation that’s going to override (current state law).”


Legislative fix?


Moving a tax bill through the state Legislature could take up to nine months, Kiloh estimated, and in the interim, companies could continue to lose money and possibly go under.


He suggested the conversation should shift to conflicting mandates within Proposition 64, which established the current tax structure but also required that the state eliminate the unlicensed marijuana market.


“If there’s a statute that says, ‘You can’t (enlarge) the illicit market,’ and you have a statute that says, ‘You need to charge us 15% (in excise tax),’ which one supersedes the other?” Kiloh said.


“We need to start looking at each of these provisions and ask, ‘Why does this tax supersede the intent of this law to stomp out the illicit industry?'”


Some industry watchers say the next step likely could involve a tax-reduction bill, either from Lackey or another industry ally such as Oakland Democrat Rob Bonta.


That could take the form of a temporary tax reduction – which both Lackey and Bonta have previously proposed.


Or it might entail a radical restructuring of California’s marijuana tax system to include a single tax collected at the retail point of sale – an idea some stakeholders are already pushing.


However, any stand-alone tax reduction bill would need to meet the tough threshold of two-thirds support in both chambers of the state Legislature.


If that doesn’t gain traction, then a marijuana tax reduction could get worked into the state budget, a process over which Newsom has a lot of control.


Jenkins, the CCIA lobbyist, also reiterated that a highly anticipated report on state cannabis taxes from the Legislative Analyst’s Office is due in mid-December, which could provide even more ammunition to persuade lawmakers to ratchet down taxes.


Jenkins said there’s “more appetite for tax reform this year than ever” inside the Capitol. CCIA has made the case to Newsom’s office and legislators that the legal marijuana industry is on the brink of failure, she added.


“We’re talking about layoffs, the fact that the industry has constricted pretty significantly, the fact that capital is drying up,” Jenkins said. “The industry is really struggling … and I think there’s a recognition of that finally among the majority of our legislators.”

 

[momofthegoons]

This is such BS in my humble opinion. Not that my word is gospel... but I used cannabis during both of my pregnancies. It helped tremendously with nausea and other symptoms caused by it. Both of my children were a good birth weight and healthy. Both have high IQ's..... They have nothing to substantiate that cannabis is dangerous to pregnant women and I feel this is more fear mongering.

California Could Declare THC A Risk For Pregnant Individuals

The California Cannabis Industry Association believes there’s too little data to support such a claim.

LOS ANGELES (AP) — More than three years after California voters broadly legalized marijuana, a state panel is considering if its potent, high-inducing chemical — THC — should be declared a risk to pregnant women and require warnings.

Studies have indicated that a rising number of mothers-to-be have turned to marijuana products for relief from morning sickness and headaches, though it’s effectiveness has not been backed by science.

Cannabis industry officials say too little sound research is available on THC to support such a move and warn that it could make marijuana companies a target for lawsuits with unverified claims of injuries from pot use during pregnancy.

“That seems like an open-ended checkbook. How do we defend ourselves?” said Los Angeles dispensary owner Jerred Kiloh, who heads the United Cannabis Business Association, an industry group.


Lawyers looking for a quick buck will say “give us $10,000 or we are going to take you into a long court case,” he added.

The California Cannabis Industry Association echoed that fear, noting that pot’s standing as an illegal drug at the federal level has choked off research by government agencies. Those studies are needed to determine if THC poses health risks for pregnant women.

“Good policy and consumer protections are based on facts and data,” spokesman Josh Drayton said.


The meeting Wednesday of the obscure state Developmental and Reproductive Toxicant Identification Committee in Sacramento will focus on whether THC causes “reproductive toxicity.” The panel is made up of scientists appointed by the governor.

An affirmative finding would make THC one of hundreds of chemicals judged to cause cancer or birth defects that the state requires to carry warning labels, such as arsenic and lead.

The review is being carried out under the umbrella of the Safe Drinking Water and Toxic Enforcement Act, better known as Proposition 65. It requires warning labels for chemicals judged as dangerous and allows residents, advocacy groups and attorneys to sue on behalf of the state and collect a portion of civil penalties for failure to provide warnings.


The 1986 law has been credited with weeding out cancer-causing chemicals from products but also faulted for setting the stage for legal shakedowns.

Since 2009, the state has listed marijuana smoke as being known to cause cancer, similar to tobacco smoke.

“The expansion of Proposition 65 as it relates to cannabis is premature and lacks both the facts and the data that would justify this move,” Drayton said.

The U.S. surgeon general warned in August that smoking marijuana is dangerous for pregnant women and their developing babies. Mainstream medicine advises against pot use in pregnancy because of studies suggesting it might cause premature birth, low birth weight or other health problems, but many of those studies were in animals or had findings that were open to dispute.

The National Institute on Drug Abuse is paying for several studies on marijuana use during pregnancy.

If the California panel declares pot a risk for pregnant women, it’s not clear what the immediate impact would be on the state’s legal pot industry.

Presumably, packaging would need to be changed over time to carry warning labels for pregnant women. But such requirements would likely take additional steps by agencies that oversee marijuana regulation and packaging.

Even products containing CBD, a trendy ingredient extracted from marijuana or hemp, can contain trace amounts of THC.

 

[ataxian]

This is such BS in my humble opinion. Not that my word is gospel... but I used cannabis during both of my pregnancies. It helped tremendously with nausea and other symptoms caused by it. Both of my children were a good birth weight and healthy. Both have high IQ's..... They have nothing to substantiate that cannabis is dangerous to pregnant women and I feel this is more fear mongering.

California Could Declare THC A Risk For Pregnant Individuals

The California Cannabis Industry Association believes there’s too little data to support such a claim.

LOS ANGELES (AP) — More than three years after California voters broadly legalized marijuana, a state panel is considering if its potent, high-inducing chemical — THC — should be declared a risk to pregnant women and require warnings.

Studies have indicated that a rising number of mothers-to-be have turned to marijuana products for relief from morning sickness and headaches, though it’s effectiveness has not been backed by science.

Cannabis industry officials say too little sound research is available on THC to support such a move and warn that it could make marijuana companies a target for lawsuits with unverified claims of injuries from pot use during pregnancy.

“That seems like an open-ended checkbook. How do we defend ourselves?” said Los Angeles dispensary owner Jerred Kiloh, who heads the United Cannabis Business Association, an industry group.


Lawyers looking for a quick buck will say “give us $10,000 or we are going to take you into a long court case,” he added.

The California Cannabis Industry Association echoed that fear, noting that pot’s standing as an illegal drug at the federal level has choked off research by government agencies. Those studies are needed to determine if THC poses health risks for pregnant women.

“Good policy and consumer protections are based on facts and data,” spokesman Josh Drayton said.


The meeting Wednesday of the obscure state Developmental and Reproductive Toxicant Identification Committee in Sacramento will focus on whether THC causes “reproductive toxicity.” The panel is made up of scientists appointed by the governor.

An affirmative finding would make THC one of hundreds of chemicals judged to cause cancer or birth defects that the state requires to carry warning labels, such as arsenic and lead.

The review is being carried out under the umbrella of the Safe Drinking Water and Toxic Enforcement Act, better known as Proposition 65. It requires warning labels for chemicals judged as dangerous and allows residents, advocacy groups and attorneys to sue on behalf of the state and collect a portion of civil penalties for failure to provide warnings.


The 1986 law has been credited with weeding out cancer-causing chemicals from products but also faulted for setting the stage for legal shakedowns.

Since 2009, the state has listed marijuana smoke as being known to cause cancer, similar to tobacco smoke.

“The expansion of Proposition 65 as it relates to cannabis is premature and lacks both the facts and the data that would justify this move,” Drayton said.

The U.S. surgeon general warned in August that smoking marijuana is dangerous for pregnant women and their developing babies. Mainstream medicine advises against pot use in pregnancy because of studies suggesting it might cause premature birth, low birth weight or other health problems, but many of those studies were in animals or had findings that were open to dispute.

The National Institute on Drug Abuse is paying for several studies on marijuana use during pregnancy.

If the California panel declares pot a risk for pregnant women, it’s not clear what the immediate impact would be on the state’s legal pot industry.

Presumably, packaging would need to be changed over time to carry warning labels for pregnant women. But such requirements would likely take additional steps by agencies that oversee marijuana regulation and packaging.

Even products containing CBD, a trendy ingredient extracted from marijuana or hemp, can contain trace amounts of THC.

CBD is essentially decant?
THC is important as well,,
Written for those in need!

 

[Baron23]

These idiots in CA state government deserve the thriving black market and loss of tax revenue that this will result in. Good job, fellas.

California Marijuana Taxes Will Increase New Year's Day

After having avoided an increase in state taxes on legal marijuana, California officials changed course Thursday and announced MJ excise and cultivation taxes will go up effective Jan. 1.

High state and local tax rates have been an industry problem that have made legal businesses less competitive with the illicit market: Unlicensed retailers can lure customers with lower prices, since rogue shops don’t pay any taxes.

In announcing the move, the California Department of Tax and Fee Administration (CDTFA) -- which must recalculate the wholesale cannabis markup rate every six months -- revealed that the markup rate for the marijuana excise tax will increase from 60 percent to 80 percent on New Year’s Day.
The markup rate is used to provide the basis for California’s 15 percent excise tax.

The increase will also raise the state cultivation tax to adjust for inflation, raising those taxes as well:

• $9.65 from $9.25 for an ounce of flower, or an increase of 4.3 percent.
• $2.87 from $2.75 for an ounce of leaves, or an increase of 4.3 percent.
• $1.35 from $1.29 for an ounce of fresh marijuana plant material, or an increase of 4.6 percent.

The CDTFA’s markup rate is based on the wholesale average market price of cannabis, and the agency had previously declined to increase the state marijuana tax rate.
The agency statement said the markup rate change was based on “an analysis of statewide market data,” and a CDTFA spokesman wrote in an email to Marijuana Business Daily that the tax adjustments are a result of existing state law.

“When implementing (Proposition 64), the Legislature moved the incidence of the tax from the retailer to the distributor, requiring CDTFA to determine the average markup rate every six months,” CDTFA spokesman Casey Wells wrote.

“The purpose of the markup is to have the actual tax match the 15 percent gross receipts rate approved by voters. After analyzing thousands of transactions in the state’s Track and Trace system, CDTFA analysts have determined that the required markup rate for the period beginning January 1, 2020, is 80 percent.”

When asked if the excise markup rate will change again in another six months, Wells said that will depend on wholesale market data. But the cultivation tax, since it’s based on inflation, would only be adjusted once a year, he said.

To date, legislative efforts to lower state taxes have fallen short, meaning the legal supply chain has continued to struggle to attract customers.
Nicole Elliott, senior advisor on cannabis in Gov. Gavin Newsom’s Office of Business and Economic Development, emphasized that the tax hike “is not a discretionary action” by CDTFA, but rather a natural outcome of laws established in 2017 by the legislature.

“We support policies that lead to less cash flow issues for small businesses, establish more parity across the industry, simplify compliance for everyone involved and support a healthy legal market,” Elliott wrote in an email to MJBizDaily.

“We remain committed to working with stakeholders and the Legislature to further develop a framework that realizes all these things.”

Industry insiders, however, immediately criticized the move, as did Oakland Democrat Rob Bonta, a state assembly member who has twice tried -- but failed -- to lower MJ taxes through the legislature.

In an emailed statement, Bonta called the tax hike “deeply concerning.”

“This short-sighted move ignores the realities that licensed businesses are at the breaking point, with many struggling to survive,” Bonta wrote, and reiterated his support for at least temporarily lowering state cannabis taxes.

The California Cannabis Industry Association (CCIA) said the increase left its members “stunned and outraged.”
“As California’s regulated market spirals towards collapse from taxes on cannabis consumers … we believe that the CDTFA’s decision to increase tax burdens on compliant cannabis operators is counter to developing a safe industry,” according to the association’s statement.

“Widening the price disparity gap between illicit and regulated products will further drive consumers to the illicit market at a time when illicit products are demonstrably putting people’s lives at risk.”

Other industry insiders agreed.

“At the very least, this is tone deaf, given what the legal industry is going through right now and the lack of control of the illicit market,” said Adam Spiker, the executive director of the Southern California Coalition, a Los Angeles-based cannabis trade group.

A report on cannabis taxes, expected in December from the Legislative Analyst’s Office (LAO), has been highly anticipated by industry insiders who hope it will give them political ammunition to support lowering statewide marijuana tax rates.

Bonta cited that upcoming report in his emailed statement, and said the state would be “wise to consider the findings (of the LAO)… before unilaterally moving to create an even heavier tax burden” for the legal cannabis trade.

 

[Baron23]

California agency suggests state marijuana tax system shift to potentially lower rates, address illicit-market threat

An independent California state agency issued a long-awaited report about the state’s cannabis tax system, and its recommendations include a major overhaul that would simplify and possibly reduce marijuana tax rates.


The goals of the report were to assess how California’s marijuana taxes can best undercut the illegal market, discourage cannabis use by youth and also generate enough tax revenues to allow the state to properly oversee the legal cannabis industry.


Industry watchers suggest stakeholders will reference the report heavily during heated debates in the upcoming legislative session over whether to lower state marijuana tax rates.


The report from the state Legislative Analyst’s Office (LAO) suggested several dramatic policy changes to California’s current marijuana tax structure, including:

• Doing away with the weight-based cultivation tax entirely.
• Replacing the state’s 15% excise tax with one based on either a tiered percentage of product sales price or one based on product potency.
• Simplifying the tax-collection process so that all marijuana-related taxes are collected by retailers at the point of sale to customers instead of the current system – under which most taxes are collected and remitted to the state by distributors.

In a statement, the California Cannabis Industry Association (CCIA) said the recommendations “mirror legislative priorities that CCIA’s membership have been advocating for over three years.”


“Comprehensive tax reform will incentivize consumers to purchase regulated cannabis products, ease administration and compliance and increase and stabilize revenues for the state,” the CCIA noted.


State Assembly Member Tom Lackey, a Republican from Palmdale who’s backing marijuana tax reduction, said lawmakers must make undercutting the illicit market a top priority when they reconvene in Sacramento in January.


He argued that unless California successfully quashes the illegal cannabis market, then the other two LAO goals of ensuring state revenue and preventing youth cannabis use will prove “irrelevant.”


“This tax structure – we’re killing ourselves with it, and we’re killing the industry with it,” Lackey said. “We need to focus on simple, practical solutions.”


No silver bullet


The report, which was issued less than a month after state regulators announced that marijuana taxes will go up Jan. 1, echoed many of the talking points that industry insiders have hammered on for months, including that higher state taxes only empower the illicit market.


But it also cautioned that lowering state taxes could have offsetting impacts, depending on state lawmakers’ goals.


“Reducing the tax rate would expand the legal market and reduce the size of the illicit market,” the report notes. “On the other hand, such a tax cut would reduce revenue in the short term, potentially to the extent that revenue could be insufficient.”


The report asserted that state marijuana tax revenues needed to hit $350 million in the 2021-2022 fiscal year to be “sufficient” to cover mandated expenditures under California law and suggested that lowering the tax rates might not be enough to hit that revenue benchmark.


The LAO offered up a range of tax possibilities and changes and found that if the Legislature wanted to go with a potency-based tax – which is what the Canadian federal government uses – that a rate of $0.006 to $0.009 per milligram of THC would be advisable.


If lawmakers wanted to prioritize undercutting the illicit market, the report concluded, then they should adopt a tax at the lower end of that range. If legislators want to focus on preventing youth marijuana use, they should adopt a tax at the higher end.


The LAO also warned that a tax reduction won’t offer a silver bullet against the illicit marijuana market:


“Under current market conditions, changes in the state tax rate likely would not make legal cannabis less expensive than illicit cannabis.


“Even if the state eliminated its cannabis taxes entirely, other costs – such as regulatory compliance costs and local taxes – likely would keep legal cannabis prices higher than illicit market prices.”


The report further noted that local governments across California could respond by raising their own tax rates even if the state lowered its rates, making the situation a zero-sum gain for the industry.


Regardless, the report was immediately hailed by industry stakeholders as a win.


‘Lower and simplify’ taxes


State Assembly Member Rob Bonta, a Democrat from Oakland, wrote on Facebook that the report “delivers a clear message that the status quo is not working” and promised to reintroduce legislation he carried in 2019 to temporarily lower marijuana taxes.


“We must lower and simplify the taxes on cannabis if the regulated cannabis industry in California is to survive, let alone thrive,” Bonta wrote.


Assembly Member Lackey said that both he and Bonta in the 2020 legislative session will be “very motivated to try to get (marijuana tax reform) to happen as soon as possible because the market (is) headed in the wrong direction.”


The United Cannabis Business Association (UCBA), another California marijuana trade group, wrote in a statement that the report “represents the foundation for the work that we must now do to identify an appropriate level of taxation that will move buyers away from the illicit market.”


Legislative advocate Max Mikalonis of Sacramento-based K Street Consulting was a bit more circumspect and said the report is “no slam dunk.”


“The report could have been stronger on acknowledging the size and impact of the unlicensed market and acknowledging how not price competitive the legal market is with the illicit market,” Mikalonis said.


He added the illegal market is still “three times the size” of the legal one.


But, he noted, the report “gives me real hope” that serious marijuana tax reform can get pushed through the California Legislature next year.


“Whether or not we get an overall reduction in rates … that remains to be seen,” Mikalonis concluded.

 

[TheThriftDrifter]

Our local city council once used an increase in fees/tax to get rid of legitimate older mobile food vendors(burger trucks, coffee caravans)

Once the new vendors were in place, they quietly lowered the fees again.

It wouldn't surprise me if the CDTFA knows exactly what they are doing and are doing it in order to squeeze out the small players to open up the market for the bigger boyz.

Pure speculation on my behalf though.

 

[Baron23]

"changes would include moving the responsibility for the cultivation excise tax from the final distributor to the first and the retail excise tax from the distributor to the retailer."​

Isn't this a bit like rearranging the chairs on the Titanic?

California governor moves to simplify marijuana regulatory, tax systems

California Gov. Gavin Newsom’s administration on Friday announced plans to simplify the state’s cannabis regulatory and tax systems, which have been blamed for enabling an illicit market to continue to thrive.

The proposed changes, which will be in Newsom’s state budget proposal, come in the wake of recommendations by an independent agency that the state overhaul its cannabis tax regime.

Newsom’s plan include consolidating the current three licensing entities – the Bureau of Cannabis Control, the Department of Food and Agriculture, and the Department of Public Health – into a single Department of Cannabis Control by July 2021.

His administration also proposed changes designed to reduce the tax-collection burden on the cannabis industry and simplify the tax-collection process.

Those changes would include moving the responsibility for the cultivation excise tax from the final distributor to the first and the retail excise tax from the distributor to the retailer.

Newsom’s administration said that, in consultation with the industry and stakeholders, it also will consider changes to the existing cannabis tax rates and the number of taxes.

The United Cannabis Business Association (UCBA) praised the move.

“Since legalization, the California cannabis industry and its consumers have struggled to navigate an increasingly complex regulatory landscape – a situation that contributed to the growth of the illicit market and the current accessibility of untested products, as well as an increased cost of compliance to license holders,” the UCBA said.

“Today’s announcement from the governor marks a turning of the tide, and we are encouraged by the efforts outlined to streamline the industry’s regulatory framework and simplify licensing and taxation.”

 

[Baron23]

It doesn't matter to the consumer WTF the taxes are collected....what matters is HOW MUCH TAX and CA is just bolstering the black market with it budgetary greed.



Gov. Newsom’s budget calls for changing how California regulates its cannabis industry

Governor proposes new Department of Cannabis Control, tweaks to tax collections.
Gov. Gavin Newsom is recommending a major overhaul to how California regulates its multibillion-dollar cannabis industry, with changes aimed at streamlining oversight and tax collection included in the proposed state budget he released Friday morning.
Industry leaders are applauding the proposals, which are expected to ultimately make things easier for licensed businesses to navigate the legal market and compete with illicit operators.
“Today’s announcement from the governor marks a turning of the tide,” said Jerred Kiloh, board president for the Los Angeles-based United Cannabis Business Association trade group.
But there’s also concern about a rocky transition that could pose problems for businesses already struggling to hang on amid burdensome regulations and a thriving illicit market.
“This next year is going to be very critical in seeing how quickly we can course correct and how quickly we can start to see the impacts of these changes,” said Josh Drayton, spokesman for the Sacramento-based California Cannabis Industry Association. “We have to see who survives.”
Newsom’s draft 2020-21 budget calls for collapsing the three state departments that currently oversee the marijuana industry – the Bureau of Cannabis Control for retailers, distributors and testing labs; the Department of Food and Agriculture for cultivators; and the Department of Public Health for product manufacturers – into one new Department of Cannabis Control by July 2021. That will give businesses, which often deal with multiple parts of the supply chain, one point of contact.
It’s not yet clear whether the Bureau of Cannabis Control – which is run by Chief Lori Ajax, a former alcohol regulator assigned by former Gov. Jerry Brown – will step into the lead role in the new department or if it will be rebuilt under new leadership. Newsom’s administration is expected to release details on the consolidation plan this spring.
Newsom’s budget also calls for collecting taxes directly from retailers rather than the current practice of having distributors collect and pay up. It’s a move backed by the nonpartisan Legislative Analyst’s Office in a December report.
Industry advocates were encouraged by a note Newsom included in the budget that says his administration will “consider other changes to the existing cannabis tax structure,” including a potential rate adjustment. Drayton said they hope to push – either in upcoming revisions to Newsom’s budget or through legislation – for the state to eliminate its marijuana cultivation tax and at least temporarily reduce the retail tax.
As it stands, Newsom is budgeting for a 15% increase to marijuana tax revenue, from $479 million this fiscal year to $550 million in the 2020-21 year. That will give the state more money for causes mandated by the 2016 legalization measure, Proposition 64.
Along with $60.3 million for child care, Newsom’s budget calls for spending nearly $200 million in cannabis taxes on programs that support youth substance disorder treatment and school retention. An estimated $66.6 million will be directed to clean up environmental damage from illegal cannabis cultivation. And another $66.6 million will go to public safety-related activities.

 

[ClearBlueLou]

Doesn’t seem to me like they have ANY interest in cannabis at all: hefty taxes are their game, and I think they’d tax SAND instead if they could come up with a rationale.... I wish they’d focus on the legalization and let the taxes take care of themselves - but that’s not a CA-specific matter: the problem is in every state currently blinded by HUGE NEW TAXES

 

[Baron23]

"Newsom also aims to simplify the tax-collection process on marijuana. As noted in the released provisions, the administration wants to "move the responsibility for the cultivation excise tax from the final distributor to the first, and for the retail excise tax from the distributor to the retailer." Doing this would mean the California Department of Tax and Fee Administration wouldn't have to adjust the markup rate for cannabis products every six months."​

Again, to me moving where the taxes are collected may make it easier on industry but does nothing for the consumer...zero. Yeah, they won't have to adjust the mark up rate every six months. I mean, WTF....they are already taxing the crap out of it, right?

"But the most exciting change might just be that Newsom and his team are taking into consideration the idea of lowering existing tax rates on legal pot products."​

Taking into consideration an idea, eh? Now that's full throated advocacy of a policy if I ever heard one....sigh.


Major Tax Changes Are in the Works for the Biggest Marijuana Market in the World

Regulatory and tax reforms have been proposed to tip the scale in favor of legal cannabis operators.

Although 2019 began well for cannabis stocks and industry hopes were (pardon the pun) high, it ended in disaster.

With Canada having legalized recreational pot in October 2018, growers on track to launch derivative products later in 2019, and legalization momentum remaining strong in the U.S., the forecast was for marijuana stocks to push toward profitability by year's end. However, this didn't happen.

In Canada, supply issues have been persistent since day one of legalization, and the launch of derivatives wound up being delayed by at least two months, until mid-December. Meanwhile, select U.S. states that have legalized recreational pot have been taxing the daylights out of consumers, which has made it virtually impossible to compete with black-market producers on price. In short, illicit growers have been thriving throughout North America.

Cannabis sales are stagnant in the largest pot market, California
Perhaps no disappointment has been greater than that of California, the biggest marijuana market in the world by annual sales. According to an estimate in the "State of the Legal Cannabis Markets" report by Arcview Market Research and BDS Analytics, California was on track for $3.1 billion in legal weed sales in 2019, which is practically quadruple what Canada sold in trailing-first-year sales following the legalization of adult-use weed.

Although $3.1 billion probably sounds like a lot of cannabis being sold, it's best to understand the context of this figure. Total weed sales in 2017 in California were $3 billion. Mind you, recreational pot sales weren't yet legal in 2017, meaning this was being driven entirely by legal medical marijuana sales. In 2018, once the doors were open to adult-use weed, total state sales fell (yes, fell) to $2.5 billion, and are expected to have increased to $3.1 billion in 2019.

How, exactly, does the most lucrative marijuana market in the world stumble so badly in the sales department when there's obvious demand for pot products? All you have to do is look at the state's exorbitant tax rate on cannabis.

On top of already high state and local sales tax rates, California tacks on a 15% excise tax and a wholesale tax that's dependent on the state of the product (i.e., whether it's leaves or flower). Additional expenses, such as laboratory testing, are also factored into the final price of the product. As a result, black-market sales are nearly three times higher than legal sales in the Golden State at the moment.

However, Governor Gavin Newsom, a Democrat, hopes to change this.

California has proposed significant regulatory and tax reforms
A little more than a week ago, Newsom's administration unveiled a number of provisions in the state's annual budget proposal that are designed to simplify the regulatory and tax structure on the pot industry.

For example, Newsom's proposal would create the Department of Cannabis Control by July 2021. This would take three existing licensing entities -- the Bureau of Cannabis Control, the Department of Public Health, and the Department of Food and Agriculture -- and place them all under one roof, the hope here being that a single entity with enforcement and licensing power will more effectively help establish a legal presence and drive illicit producers out of business.

Newsom also aims to simplify the tax-collection process on marijuana. As noted in the released provisions, the administration wants to "move the responsibility for the cultivation excise tax from the final distributor to the first, and for the retail excise tax from the distributor to the retailer." Doing this would mean the California Department of Tax and Fee Administration wouldn't have to adjust the markup rate for cannabis products every six months.

But the most exciting change might just be that Newsom and his team are taking into consideration the idea of lowering existing tax rates on legal pot products. Right now California-focused pot businesses simply have no chance of competing on price with black-market growers. Substantially lowering the aggregate tax on legal weed would be viewed as a major step in the right direction.

A big hill to climb
Of course, while an exorbitant tax rate on legal weed is a big problem for California, it's not the only issue.

Like most states that have given the green light to recreational marijuana, California's jurisdictions have the right to decide whether or not to allow cannabis retailers a presence. A little over 80% of the Golden State's jurisdictions have denied retailers the option of selling legal weed in their towns, making it doubly difficult for regulators to effectively drive out the as-of-now dominant illicit presence. As a result, it's the state's retailers that are paying the price.

Perhaps no multistate operator has paid a steeper price for California's struggles than MedMen Enterprises (OTC:MMNFF). MedMen, which has more than a dozen open retail locations in California, has seen sequential quarterly sales growth slow in recent quarters. These slowing sales, coupled with MedMen's aggressive expansion tactics in and outside of California, pushed its operating loss in fiscal 2019 to a staggering $231.7 million.

If California doesn't fix its problems soon, Cresco Labs (OTC:CRLBF) might also regret its acquisition of Origin House, which recently closed. Origin House is one of a select few holders of cannabis distribution licenses in the Golden State. Cresco Labs' all-stock purchase of Origin House gives the company access to approximately 575 dispensaries in the state with which to sell its products. However, if pricing remains a concern due to high tax rates on cannabis, Cresco's ambitions may need to be tempered a bit.

The prospect of regulatory changes being on the horizon is certainly a step in the right direction for California. But I'm not going to be convinced that California-focused marijuana stocks will be better off until the state tackles its ridiculously high tax rates on marijuana.

 

[Baron23]

California lawmakers say pot taxes must be cut to help an industry ‘on the brink’

California lawmakers on Friday revived a proposal to temporarily cut taxes on marijuana to boost a legal market that one official said is “on the brink of collapse,” drawing encouragement from Gov. Gavin Newsom as he seeks to overhaul state pot regulators.

The bill would cut the state excise tax on marijuana sales from 15% to 11% for three years while eliminating a cultivation tax for that period. Similar legislation has been shelved in the last two years, with Newsom saying he felt it was too soon after legalization to make changes to the law.

But the governor signaled last week that he might be changing his mind, proposing in his new state spending plan a shakeup of the agencies that regulate cannabis sales as well as a streamlining of the method of collecting taxes, and saying he is open to considering other measures to boost a legal industry created when California voters approved Proposition 64 in 2016.

“The governor’s office through its proposed budget has shown that it understands action needs to be taken,” said Assemblyman Rob Bonta (D-Alameda), a lead author of the new bill, who noted that an estimated 75% of marijuana sales in the state continue to come from the black market. “With these steps, we believe that we will be supporting the regulated marketplace for cannabis in California. It will also help reduce and shrink the unlicensed, illicit market.”

The tax cut was also supported by State Treasurer Fiona Ma and co-authored by three other legislators, including Republican Assemblyman Tom Lackey of Palmdale. He said Assembly Bill 1948 will “provide relief to an industry that’s clearly on the brink of collapse.”

California’s legal market has not grown as expected, a problem the cannabis industry and some state officials have attributed to factors including high taxes, bureaucratic red tape and the fact that three-quarters of California cities have banned pot shops.

Josh Drayton of the California Cannabis Industry Assn. said the new proposal “is absolutely critical to the survival of California’s regulated cannabis industry,” adding it is “necessary for regulated operators to compete against a thriving illicit market that evades the financial obligations which drive up the cost of tested and regulated cannabis products.”

Some supporters of Proposition 64 predicted a legal marijuana market in California would bring in $1 billion in annual tax revenue for the state, but the governor’s budget last week estimated only $479 million will be generated in the current fiscal year and $550 million in the budget year beginning July 1.
“I was a proponent of the initiative,” Newsom said last week. “We said it would take five to seven years to get close to that billion dollars. We are marching in that direction.”

Even so, Newsom’s new budget proposes combining licensing and enforcement at three state agencies under a new Department of Cannabis Control by July 2021.
Currently, the state Bureau of Cannabis Control licenses retailers, delivery firms and distributors and enforces the rules, while pot farms are licensed and regulated by the state Department of Food and Agriculture. Manufacturers of products including edible pot are overseen by the state Department of Public Health.

“Establishing a stand-alone department with dedicated enforcement will centralize and align critical regulatory functions to build a successful legal cannabis market, and create a single point of contact for cannabis licensees and local governments,” Newsom’s advisors wrote in the governor’s budget summary.
Details on how the agencies will be merged and operate will be released in the spring, Newsom said.

Lackey said he hopes streamlining licensing and oversight will improve lax enforcement against the illicit market, which he said has led some cities to prohibit pot shops.
Newsom has also proposed simplifying the tax structure by moving the point of collection for cannabis taxes from the final distributor to the first and the retail excise tax from distributor to retailer. He said such a plan wouldeliminate a need for the state to estimate an average mark-up rate on cannabis products to determine a wholesale tax rate that ensures the tax paid by the distributor is equal to 15% of gross receipts at retail. That process, which resulted in an increase to the tax rate on Jan. 1, has drawn criticism.

Bonta and Lackey noted that the governor also left the door open to additional tax reform, a position memorialized inNewsom’s budget: “The Administration, in consultation with the industry and stakeholders, will consider other changes to the existing cannabis tax structure, including the number of taxes and tax rates to simplify the system and to support a stronger, safer legal cannabis market,” the budget summary says.

The tax-reduction bill has also been bolstered by a new report by the state Legislative Analyst’s Office, which concluded the existing tax structure is flawed and recommended changes that could include the elimination of the cultivation tax.

California Cannabis Industry Assn. Executive Director Lindsay Robinson said the budget “reflects an understanding of our challenges, and furthermore provides solutions that will simplify tax collection, ease licensing, and eventually increase access to the regulated market.”
She said merging the three agencies “will assist in minimizing differing interpretations of the regulations,” while also boosting enforcement, “which is essential in battling against the illicit market while increasing consumer safety.”

The United Cannabis Business Assn., which represents many Los Angeles-based retailers, said the proposals represent “a turning of the tide” on the legal market.
“Since legalization, the California cannabis industry and its consumers have struggled to navigate an increasingly complex regulatory landscape — a situation that contributed to the growth of the illicit market and the current accessibility of untested products, as well as an increased cost of compliance to license holders,” said Board President Jerred Kiloh.

But the group said more work is needed.

“The Governor’s budget only lowers the burden of complexity, not the tax itself,” the association said in a statement last week. “In the coming months we’ll be working on identifying specific taxation numbers and processes behind this new structure — only then will we be able to determine the overall impact on the industry.”

 

[Baron23]

Roll back California pot taxes to save legal market

High taxes, slow-moving permit process and local government resistance has stifled state’s legalization effort
California’s legal marijuana industry has been a bust, falling far short of the sales projected when voters legalized it in 2016.
With the approval of Proposition 64, Californians made clear that they wanted to end the farce of criminalizing marijuana-related offenses, and they wanted to allow a legal market for recreational marijuana to operate.
Unfortunately, high taxes, a slow-moving permitting process and local government resistance has stifled the ability of the legal market to better get off the ground.
Estimates from Arcview Market Research and BDS Analytics suggest that black market sales of marijuana continue to make up the vast majority of marijuana sales in the state. Surveys of consumers have suggested that one factor keeping marijuana consumers away is the high rate of taxes.
Further, according to the United Cannabis Business Association, there are nearly three times as many unlicensed marijuana dispensaries and delivery services as there are licensed ones.
This reflects both the high demand for marijuana products and a clear mismatch for the government’s ability to entice more operators into joining the fully legal market.
While there are certainly many areas on the taxation and regulatory side to better facilitate participation in the legal market, one easy one is a bipartisan legislative effort from Assemblymen Rob Bonta, D-Oakland, and Tom Lackey, R-Palmdale, to temporarily lower taxes on the legal industry in an effort to better enable it to succeed.
The proposal, Assembly Bill 1948, has been offered before, but Bonta and Lackey, with backing from state Treasurer Fiona Ma, are giving it another go.
“We must lower and simplify the taxes on cannabis if the regulated cannabis industry in California is to survive, let alone thrive,” said Bonta.
He’s right. Who knew that high and complicated taxes made it hard for businesses to thrive in California?
Currently, the state taxes marijuana twice: The cultivation tax is based on the weight of the harvested cannabis and ranges from $1.35 per ounce of fresh plant to $9.65 per ounce of dried flowers. The excise tax of 15% is applied to retail sales.
In addition, local governments have tried to profit off legal pot by imposing their own taxes, which work out to an average 14% of retail sales, according to the state Legislative Analyst’s Office.
By keeping the status quo, the state is holding back the potential of those willing to abide by the law and participate in the legal market. AB 1948 would temporarily, until July 1, 2023, reduce the state excise tax to 11% and eliminate the cultivation tax.
We hope the Legislature approves AB1948 to give the legal market a better chance at being successful.

 

[momofthegoons]

POT ADVOCATES SAY OPPONENTS USING DEBUNKED STAT AGAINST DRUG TESTING BILL

California cannabis advocates are calling foul on the main data point being used against a bill that would protect medical cannabis patients’ off-the-clock use.


According to the bill’s author, Assemblymember Rob Bonta, AB 2355 would prohibit employers from discriminating against workers on the basis of their status as a medical cannabis patient or on the basis of a patient’s positive drug test for the presence of cannabis.

But a major part of the bill is that it would not protect employees who are impaired by or using cannabis in the workplace. Additionally, employers of personnel in safety-sensitive positions subjected to state and federal laws that prevent them from being able to reasonably accommodate for medical cannabis use would be exempt. That would include people like truck drivers, school bus drivers and aviation pilots. Another place the bill wouldn’t apply is for those receiving federal grants that would conflict with cannabis use.

While it doesn’t sound too wild in the age of legal marijuana to protect the rights of those using it as medicine, Americans Against Marijuana Legalization disagree.

The Opposition

AAML’s Scott Chipman took to L.os Angele’s airwaves on KNX citing a dated National Institute on Drug Abuse study that stated, “employees who tested positive for marijuana had 55 percent more industrial accidents, 85 percent more injuries and 75 percent greater absenteeism compared to those who tested negative.” The stat also found its way into an L.A. Times piece Chipman is quoted in, but it’s not specifically attributed to him.

According to the cannabis advocates at California NORML, the stat on industrial accidents and injuries is bogus and has long been debunked by a follow-up study. In an internal email provided to L.A. Weekly, Proposition 215 coauthor and CANORML executive director Dale Gieringer notes the basis of the talking point is a National Institute on Drug Abuse report citing a 1990 study of postal workers by Zwerling, Ryan and Orav, the results of which are correctly reported in the article.

“However it was part of a larger series of studies of U.S. postal workers, which we and others have actually cited to argue that drug testing is ineffective!” Gieringer said, “Indeed, a follow-up study by the same Zwerling, Ryan and Orav in 1992 concluded that pre-employment drug testing was not cost-effective!”

Another thing CANORML is taking issue with is the original study being cited as industrial accidents among “employees of all types, ” implying it looked at all sorts of industries and not just U.S. Postal Workers at one particular facility.

The study was further debunked by the larger follow-up study at 21 different post offices by Normand, Salyards & Mahoney, which came to the opposite conclusion — there were no difference in accident rates between workers who were MJ-positive and those who weren’t.

That study, however, wasn’t all pro-cannabis. Postal workers who had tested positive for illicit drugs had an absenteeism rate 59.3 percent higher than employees who had tested negative after 1.3 years. It was also found that employees who tested positive had a 47 percent higher rate of involuntary turnover than those who had tested negative, 15.41 percent versus 10.51 percent. It’ s also worth noting the study wasn’t cannabis-specific.

AAML’s Rebuttal

We reached out to Chipman to at AAML to get his take on the follow-up research, and asked if he had any concerns that his hardest pro testing talking point had previously been scuttled.

“We consider the rights of employers and employees to maintain a drug-free workplace critically important,” Chipman told L.A. Weekly in an email. “There are many groups who refer to the numbers we have cited or other evidence that marijuana use is or could be a safety hazard in the workplace.”

Again we pointed Chipman towards the updated findings.

“We don’t think pot-use impacts in the work place has been debunked,” Chipman reiterated to the Weekly. “I have 40 employees myself and I don’t want any pot or other drug users working here. Also many pot users are polydrug users and crossfade drugs, creating dramatically increased impairment…We feel very comfortable using it and think it could even be an underestimate of impacts. It could be that the dramatic increase in use is also increasing pre-employment testing.”

Chipman went on to note his organization recommends military testing protocol.

Other stances previously taken by AALM include the idea the opioid crisis is in fact a mental health crisis. Also in their FAQ in response to the lack of documented cannabis overdoses, they point to the perpetrators of various heinous crimes being cannabis users.

Lessons Learned

After giving them Chipman’s take on the research they pointed out, we asked CANORML what it’s like in the new era of cannabis reform where the opposition doesn’t have public opinion on their side anymore and point to these kinds of dated materials?

“It’s dangerous to set public policy based on a single study, but oftentimes I’ll be in meetings where someone will wave one about, sounding an alarm over it,” deputy director Ellen Komp told us. “The preponderance of evidence is on the side of sensible regulation, but it takes a lot of effort to evaluate all the studies on a topic.”

Komp said the L.A. Times story taught her that, rather than just giving an opinion when she’s asked for one, she ought to back it up with some evidence.

“I should have mentioned that The National Academy of Sciences, which conducted an exhaustive review of the literature on marijuana in 2017, concluded, “There is no or insufficient evidence to support … a statistical association between cannabis use and … occupational accidents or injuries.” she said, “Other scientific reviews have found that cannabis use is not associated with elevated rates of occupational accidents or injuries and liberalized marijuana laws are associated with greater labor participation, lower rates of absenteeism, and higher wages.”

But at the core of the argument, with all the provisions Bonta has taken to back employers of safety specific and heavily regulated workers, who are the people actually at risk by this bill passing?

“Patients who are able to work should have that right to not be discriminated for using medical cannabis, as prescribed by a physician,” Bonta said last week when announcing the bill, “These are patients who need their medicine and there is no reason why cannabis, when used for medical purposes outside the workplace and work time, should not be treated in a similar way to any other prescribed medication.”

 

[ataxian]

POT ADVOCATES SAY OPPONENTS USING DEBUNKED STAT AGAINST DRUG TESTING BILL

California cannabis advocates are calling foul on the main data point being used against a bill that would protect medical cannabis patients’ off-the-clock use.


According to the bill’s author, Assemblymember Rob Bonta, AB 2355 would prohibit employers from discriminating against workers on the basis of their status as a medical cannabis patient or on the basis of a patient’s positive drug test for the presence of cannabis.

But a major part of the bill is that it would not protect employees who are impaired by or using cannabis in the workplace. Additionally, employers of personnel in safety-sensitive positions subjected to state and federal laws that prevent them from being able to reasonably accommodate for medical cannabis use would be exempt. That would include people like truck drivers, school bus drivers and aviation pilots. Another place the bill wouldn’t apply is for those receiving federal grants that would conflict with cannabis use.

While it doesn’t sound too wild in the age of legal marijuana to protect the rights of those using it as medicine, Americans Against Marijuana Legalization disagree.

The Opposition

AAML’s Scott Chipman took to L.os Angele’s airwaves on KNX citing a dated National Institute on Drug Abuse study that stated, “employees who tested positive for marijuana had 55 percent more industrial accidents, 85 percent more injuries and 75 percent greater absenteeism compared to those who tested negative.” The stat also found its way into an L.A. Times piece Chipman is quoted in, but it’s not specifically attributed to him.

According to the cannabis advocates at California NORML, the stat on industrial accidents and injuries is bogus and has long been debunked by a follow-up study. In an internal email provided to L.A. Weekly, Proposition 215 coauthor and CANORML executive director Dale Gieringer notes the basis of the talking point is a National Institute on Drug Abuse report citing a 1990 study of postal workers by Zwerling, Ryan and Orav, the results of which are correctly reported in the article.

“However it was part of a larger series of studies of U.S. postal workers, which we and others have actually cited to argue that drug testing is ineffective!” Gieringer said, “Indeed, a follow-up study by the same Zwerling, Ryan and Orav in 1992 concluded that pre-employment drug testing was not cost-effective!”

Another thing CANORML is taking issue with is the original study being cited as industrial accidents among “employees of all types, ” implying it looked at all sorts of industries and not just U.S. Postal Workers at one particular facility.

The study was further debunked by the larger follow-up study at 21 different post offices by Normand, Salyards & Mahoney, which came to the opposite conclusion — there were no difference in accident rates between workers who were MJ-positive and those who weren’t.

That study, however, wasn’t all pro-cannabis. Postal workers who had tested positive for illicit drugs had an absenteeism rate 59.3 percent higher than employees who had tested negative after 1.3 years. It was also found that employees who tested positive had a 47 percent higher rate of involuntary turnover than those who had tested negative, 15.41 percent versus 10.51 percent. It’ s also worth noting the study wasn’t cannabis-specific.

AAML’s Rebuttal

We reached out to Chipman to at AAML to get his take on the follow-up research, and asked if he had any concerns that his hardest pro testing talking point had previously been scuttled.

“We consider the rights of employers and employees to maintain a drug-free workplace critically important,” Chipman told L.A. Weekly in an email. “There are many groups who refer to the numbers we have cited or other evidence that marijuana use is or could be a safety hazard in the workplace.”

Again we pointed Chipman towards the updated findings.

“We don’t think pot-use impacts in the work place has been debunked,” Chipman reiterated to the Weekly. “I have 40 employees myself and I don’t want any pot or other drug users working here. Also many pot users are polydrug users and crossfade drugs, creating dramatically increased impairment…We feel very comfortable using it and think it could even be an underestimate of impacts. It could be that the dramatic increase in use is also increasing pre-employment testing.”

Chipman went on to note his organization recommends military testing protocol.

Other stances previously taken by AALM include the idea the opioid crisis is in fact a mental health crisis. Also in their FAQ in response to the lack of documented cannabis overdoses, they point to the perpetrators of various heinous crimes being cannabis users.

Lessons Learned

After giving them Chipman’s take on the research they pointed out, we asked CANORML what it’s like in the new era of cannabis reform where the opposition doesn’t have public opinion on their side anymore and point to these kinds of dated materials?

“It’s dangerous to set public policy based on a single study, but oftentimes I’ll be in meetings where someone will wave one about, sounding an alarm over it,” deputy director Ellen Komp told us. “The preponderance of evidence is on the side of sensible regulation, but it takes a lot of effort to evaluate all the studies on a topic.”

Komp said the L.A. Times story taught her that, rather than just giving an opinion when she’s asked for one, she ought to back it up with some evidence.

“I should have mentioned that The National Academy of Sciences, which conducted an exhaustive review of the literature on marijuana in 2017, concluded, “There is no or insufficient evidence to support … a statistical association between cannabis use and … occupational accidents or injuries.” she said, “Other scientific reviews have found that cannabis use is not associated with elevated rates of occupational accidents or injuries and liberalized marijuana laws are associated with greater labor participation, lower rates of absenteeism, and higher wages.”

But at the core of the argument, with all the provisions Bonta has taken to back employers of safety specific and heavily regulated workers, who are the people actually at risk by this bill passing?

“Patients who are able to work should have that right to not be discriminated for using medical cannabis, as prescribed by a physician,” Bonta said last week when announcing the bill, “These are patients who need their medicine and there is no reason why cannabis, when used for medical purposes outside the workplace and work time, should not be treated in a similar way to any other prescribed medication.”

The FEDERAL GOVERNMENT in DC need’s to make CANNABIS and it’s derivative components legal?
Each state with different law’s?

 

[Baron23]

Humboldt County program takes cannabis code enforcement to 'new heights,' wins award


HUMBOLDT, Calif. — Humboldt County has taken its code enforcement of illegal cannabis grows to thousands of miles above the Earth, according to the California State Association of Counties.
The Humboldt County Planning and Building Department is using satellite footage to come across grows that are not in compliance through the Humboldt Environmental Impact Reduction Program, a press release said. The Humboldt County Board of Supervisors will receive the CSAC Challenge Award on March 10 for the program.



According to the press release, despite the legalization of cannabis, there are still a large number of illegal grows taking place, leading to sites that are not in compliance and significant environmental impacts. Previous to the program staff would be sent into the 4,000-square-mile county to search for illegal grows.
Use of satellite technology has resulted in the volume of cases being processed to increase tenfold, the press release said. Since the program was implemented, more than 1,000 non-compliant sites have been identified, about 400 have come into complete compliance, another third are working toward compliance and others have stopped growing.
“If cannabis is going to be a legal and regulated product, the illegal portion of it needed to be addressed and it needed to be addressed in a proactive way. That allowed us to be creative in ways to go about doing that,” County Planning and Building Director John Ford said.
The county was primarily dependent on citizen complaints before the satellite program. Inspecting three or four sites would take staff a full day to investigate. They would also encounter roadblocks such as numerous locked gates or not finding hidden cannabis grow, the press release said.
“From desktop computers we can monitor the entire expanse of the County,” Humboldt County Planning and Building Department Deputy Director Bob Russell said. “We can assess whether structures are permitted, if there’s been tree removal and grading and if that’s permitted, and very efficiently assess whether there’s violations on the property or whether it’s permitted activity.”
According to the Humboldt County website, the satellite program is achieving one of its primary goals: reducing environmental impacts. Sites without permits often involve poor grading, the use of pesticides, roads never intended for daily travel, failed culverts, badly engineered ponds and loss of tree canopy and timberland, the county said.
Humboldt County staff said they believe they are the first in the country to purchase satellite time to collect data solely for the purpose of identifying and monitoring cannabis operations. The press release said, while there is a cost involved with the purchase of satellite time, the County is saving significant amounts of staff time. With fines set at $10,000 per day for each violation, revenues have significantly exceeded the cost of the imagery and staff time to manage it, according to the Humboldt county website.
The Board of Supervisors will also receive the UC Cooperative Extension award for its Prescribed Fire Program from Graham Knauss, CSAC Executive Director on March 10.

 

[Baron23]

And I would wager that this amount would be much higher if the greed by the state and its confiscatory taxes weren't hobbling the regulated market.

Short sighted is a vast understatement, IMO.

California passes $1 billion in cannabis tax revenue two years after launching legal market

Millions go to child care, public safety and research, but growth stagnates as regulated industry struggles to compete.
California has raised $1 billion in cannabis tax revenue since the industry kicked into gear in January 2018, according to figures recently released by the state.
The bulk of that $1.03 billion in tax money, after covering regulatory costs, has been spent on programs such as child care for low income families, cannabis research, public safety grants and cleaning up public lands harmed by illegal marijuana grows.
While industry insiders and advocates are celebrating those numbers, they’re also raising a flag about stagnating revenues and ongoing layoffs. Those hurdles, many say, can be fixed if regulators make key changes, including a seemingly counter intuitive push to lower the state’s cannabis tax rate.
In 2016, when California voters approved the legalization of recreational cannabis, officials projected that once the industry was mature it would generate $1 billion a year in taxes.
Though growth has been slower than expected, and legal operators continue to be hurt by the persistence of the illicit cannabis market, cannabis tax revenues have been rising, from $72.6 million in the first three months of legalized sales in 2018 to $172.7 million in the last three months of 2019. If that growth rate holds steady in this third year, the industry will hit $1 billion in annual tax revenue in 2020.
But growth slowed significantly in the fourth quarter of 2019, according to figures released March 6 by the California Department of Tax and Fee Administration. The $2.6 million increase, or 1.5%, was the smallest quarter-to-quarter gain in tax revenue since the market kicked off. In previous quarters, increases averaged 15.5%.
“It’s an industry that was supposed to be huge, going gangbusters with the green rush,” said Zachary Pitts, chief executive of the delivery service Ganja Goddess and president of the California Cannabis Delivery Alliance.
“It has been growing, but it’s not nearly where I think people were expecting it to be.”
The problems, industry insiders say, remain largely the same as they were on day one: Most of California — three quarters of all cities and counties in the state — still ban retail shops in their borders.
Also, the federal government still says marijuana is an illegal drug on par with heroin. That means cannabis businesses can’t use traditional banks, raise capital like other industries, or write expenses off on their federal taxes.
Perhaps most notably, the state’s entrenched illicit market is still thriving, accounting for an estimated 75% of all marijuana sales. And with high taxes and regulatory costs keeping marijuana products at licensed businesses 30% to 80% pricier than products sold at underground shops, many consumers aren’t making the switch to the licensed industry.
“Somewhere along the supply chain, we need to lower the cost of doing business,” said Jerred Kiloh, board president for the United Cannabis Business Association trade group.
All cannabis legally sold in California comes with a 15% excise tax, a cultivation tax by weight and regular state sales tax. Plus cities and counties can tack on their own taxes, which can be as high as 20%.
Some lawmakers have introduced bills to eliminate the cultivation tax and at least temporarily lower the excise tax. Similar bills failed in previous sessions, but are pending again this cycle. Supporters say they would boost tax revenue because licensed shops would see a spike in sales if they could price their products closer to underground rates.
But the state actually increased the industry’s tax rate Jan. 1 to match inflation and new market data, with marijuana retailers paying 12.5% more in taxes while cultivator taxes went up more than 4%.
It’s tough to put a number on the direct impact of that hike, Kiloh said, since other factors — from the vaping crisis to uneven enforcement — also affect the industry.
In December, for example, state regulators and local law enforcement teamed up to raid 24 unlicensed shops in Los Angeles. In the following weeks, Kiloh said surrounding licensed businesses reported a 25% jump in sales. But after a few weeks, Kiloh said those new customers seemed to evaporate.
Same goes for January, when Kiloh said licensed shops throughout the state reported an average 10% bump in sales, which they attribute to the online marijuana shop directory Weedmaps agreeing to stop listing illicit stores. But once again, sales soon dropped back to where they were, and Kiloh said they’ve been stagnant since.
In both cases, Kilosh said the only explanation they can come up with is those new customers suffered sticker shock at the higher prices for regulated products, and resumed shopping on the illicit market.

 

[Baron23]

California Cannabis Brands Send Letter To State Requesting Exemption From Lockdown

Cannabis retailers in California haven’t had the easiest go of legalization. Issues such as illicit storefronts dotting Los Angeles as well as an ever-shifting set of regulations from the BCC have been the reality of California’s adult-use market. This past week the cannabis industry, along with the rest of North America, was hit with a new problem in COVID-19.

COVID-19, or Coronavirus, has taken the world by storm since first appearing in the Wuhan province of China more than 4 months ago. Now entering pandemic stages some states have taken drastic steps to help ‘flatten the curve’ or curb the ever-increasing infection rate. One of these steps to ‘flatten the curve’ has been social-distancing and event closures across the country.

As the virus progressed, San Fransisco’s Bay Area has implemented what is the strictest policy thus far in the country. ‘Shelter-In-Place’ states that effective at midnight, San Fran city residents would be required to stay at home “except for essential needs” and that all but essential businesses and public services would be asked to close. That order will remain in place through April 7.

In response, cannabis brands are uncertain as to how they are listed when it comes to essential businesses or non-essential. Graham Farrar, President of Glasshouse Group (which includes Glasshouse and The Farmacy) is currently circulating a letter to be sent to the Governor’s office requesting to be able to continue servicing patients during the crisis. That letter is embedded below.

Graham included this statement: “We encourage Gov Newsom and the local municipalities to remember that cannabis is at its essence medicine. The state of California has a 21yr+ history in its recognition of that fact, and nothing has changed since that. Cannabis is an essential service for many California citizens. In the face of everything that is going on, the relief that cannabis brings is needed now more than ever.”

Since this is a fluid situation we will bring you updates as they come.

*RETAILER UPDATE 4:05pm 3/16*
Etienne Fontan, director at Berkley Patients Group: “We sought immediate clarity upon learning of the shelter in place order and reached out as we could since we’re regulated by our city first, then by the state. We look forward to the Alameda County Supervisors meeting decision tomorrow. We can only work with what we have, which is today, which is static and changing. “

 

[momofthegoons]

California coronavirus lockdown: Cannabis dispensaries listed as 'essential' businesses

Coronavirus may be spreading throughout California, but at least the cannabis industry there isn’t going up in smoke.

A “safer at home” emergency order issued by the city Thursday night lists “cannabis dispensaries with a medicinal cannabis license” as being among the “essential” businesses that are permitted to keep their doors open during the outbreak.

“This Order is based upon scientific evidence and best practices, as currently known and available, to protect members of the public from avoidable risk of serious illness and death resulting from the spread of COVID-19, as well as to protect the healthcare system from a surge of cases into its emergency rooms and hospitals,” it reads.

“The entities subject to this Order that are not required to close may otherwise remain open for business and perform essential functions and operations during the duration of this Order,” it adds.

The City of Los Angeles’ coronavirus FAQ webpage offers a slightly different wording, saying “Cannabis dispensaries, or any related and/or ancillary healthcare services” are exempt from the closures.

 

[Madri-Gal]

California coronavirus lockdown: Cannabis dispensaries listed as 'essential' businesses

Coronavirus may be spreading throughout California, but at least the cannabis industry there isn’t going up in smoke.

A “safer at home” emergency order issued by the city Thursday night lists “cannabis dispensaries with a medicinal cannabis license” as being among the “essential” businesses that are permitted to keep their doors open during the outbreak.

“This Order is based upon scientific evidence and best practices, as currently known and available, to protect members of the public from avoidable risk of serious illness and death resulting from the spread of COVID-19, as well as to protect the healthcare system from a surge of cases into its emergency rooms and hospitals,” it reads.

“The entities subject to this Order that are not required to close may otherwise remain open for business and perform essential functions and operations during the duration of this Order,” it adds.

The City of Los Angeles’ coronavirus FAQ webpage offers a slightly different wording, saying “Cannabis dispensaries, or any related and/or ancillary healthcare services” are exempt from the closures.

I'm glad they are doing this. You really don't need people without meds. Especially as it's hard to get OTC, in to see your doc, get Emergency Room care. Wash hands, wash hands. Let's keep bud tenders safe.

 

[momofthegoons]

Advocates fight back against Santa Clara County’s new cannabis rules

A petition launched Friday to stop Santa Clara County from banning recreational cannabis sales at dispensaries under a new health order garnered thousands of signatures within hours, the latest call from advocates to overturn the controversial decision.

As first reported by San José Spotlight on Wednesday, Santa Clara County leaders reversed a previous decision in March to allow dispensaries countywide to remain open under a stay-at-home order, deeming them “essential” for both medicinal and recreational consumers. But a revised order issued this week further clamped down on essential businesses and the shops were ordered to only deliver recreational pot — not sell it at the store or curbside pickup.

“Non-medical cultivation, supply, and dispensing of cannabis are prohibited, with the exception of deliveries directly to residences,” said the county’s new FAQs for the revised order. “Dispensaries with a mixed clientele of both medical and non-medical customers can do in-person business only with medical customers.”

Advocates, including famed Oakland cannabis attorney James Anthony, called it a “de-facto ban” on cannabis and likened it to rolling back Prop. 64, the widely-supported 2016 measure that legalized marijuana use for adults.

“This policy will result in the loss of several businesses, hundreds of jobs in our community and hundreds of thousands of dollars in local sales tax revenue that is desperately needed to help our first responders and hospitals right now,” Anthony wrote in the petition, which netted nearly 11,000 signatures in less than 24 hours.
The problem, according to Anthony, is it’s nearly impossible differentiate between medical and recreational cannabis users. Prop. 64 blurred those lines because cannabis became legal across the state, and medical patients stopped renewing their doctor’s orders. Now, they’ll be forced to get new orders or medical cards to access marijuana at any dispensary in the county.

The changes came after Santa Clara County adopted a stricter stay-at-home order to stop the spread of the deadly coronavirus. The new order is in place until at least May 3.

Some top county elected leaders say the changes are needed to keep people safe.

“The Public Health Officer’s order has closed the overwhelming majority of storefront retail businesses,” said Cindy Chavez, president of the Santa Clara County Board of Supervisors. “It is intended to keep people inside and prevent the transmission of this deadly virus. Cannabis customers can still acquire cannabis through delivery.”

But Anthony said there’s no evidence to show that any COVID-19 illness or deaths statewide were linked to licensed cannabis retailers. “Dispensary workers are wearing gloves and masks, enforcing the distancing rule for both patrons and employees and implementing curb-side service as quickly as they can,” he wrote in the petition.

The local dispensaries are also obeying social distancing rules, advocates said, but now they worry the revised order could force consumers into the unsafe and unregulated black market.

Santa Clara County officials have not said how they’ll enforce the order and those details were not immediately available Friday. Across the county, the disease has killed 38 people and infected 1,094 as of Friday.

Anthony’s petition is the latest call to Santa Clara County to abandon the policy.

California NORML, a nonprofit organization dedicated to reforming California’s marijuana laws, put out a call to its tens of thousands of members to call or email San Jose and Santa Clara County elected officials to urge “them to keep adult-use cannabis businesses open.”

Longtime San Jose State activist William Armaline sent a letter detailing how the move to deliveries only could strap the industry.

“Many of the existing dispensaries do not have the logistical resources for a delivery operation of that scale so quickly,” wrote Armaline, who leads the university’s Human Rights Institute.

Marc Matulich, founder and CEO of Airfield Supply Company in San Jose, said no other essential business in Santa Clara County has been hit with more rules. He called it “simply discriminatory.”

Though Airfield delivers cannabis and has doubled its fleet, Matulich said it’s not enough to meet demand.

“We have seen and heard countless stories of individuals throughout this challenging time that are relying on cannabis to help them make it through what is undoubtedly a worrying time in our nation and personal lives,” Matulich said. “We are committed to restoring proper access to this essential need – in a way that reflects their will as seen in Prop. 64 and popular opinion.”