The California cannabis industry is scrambling to find a way to block a marijuana excise tax rate increase scheduled for next week, and with just days to go, Gov. Gavin Newsom has officially issued his support for suspending the tax hike.
"If the Governor receives a proposal to halt the cannabis excise tax increase, he will sign it. His record speaks for itself — from supporting the legal cannabis industry to taking down illicit operations, he remains committed to further strengthening California's growing legal cannabis market," said Diana Crofts-Pelayo, a Newsom spokesperson, in an emailed statement shared exclusively with SFGATE.
The governor's statement puts the burden on state legislators to take action. There appear to be two last-minute options that could avert the tax hike, which is set to go into effect July 1 and spike the rate from 15% to 19%: Lawmakers could rush the passage of a bill sponsored by Assemblymember Matt Haney, which would suspend the tax hike, or they could pass a new companion bill to the original budget that includes a suspension of the tax hike, according to Amy O'Gorman Jenkins, a lobbyist and the executive director of the California Cannabis Operators Association.
The industry had hoped this year's budget bill would include a suspension of the upcoming tax increase, but the details of this year's agreement were released Wednesday without including any such provision. O'Gorman Jenkins said there's still time for the tax hike suspension to be included in a companion budget bill, sometimes referred to as a "budget trailer bill," that would also need to be passed before July 1, when the state's new fiscal year begins.
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