California's legal cannabis industry has been fighting a slow, uphill battle for years. Operators have been squeezed by taxes, slow-moving regulations, and an illegal market that still outsells licensed dispensaries.
So on Sept. 22, when Gov. Gavin Newsom signed Assembly Bill 564 in an effort to lower cannabis taxes and aid the industry's struggles, many saw it less as a policy change and more as a small lifeline. The bill reverts the excise tax rate from 19%, which was raised in July, back to 15% in September, and aims to make cannabis cheaper for consumers and help dispensaries stay afloat after years of heavy regulation.
The excise tax, a tax placed on cannabis, alcohol, and other products, is one layer in a stack of fees put on cannabis, in addition to sales taxes and local city taxes. The bill rolls back to 15% of excise tax, through the end of June 2028.
In a "dying" industry, many supporters express their concerns that this bill and tax halt may not be enough to revive the industry due to different factors that contribute to its collapse, like resistant local governments and high taxes. They emphasize that more reform in taxation and policymaking would be necessary to truly make a change in the industry as a whole to make it worth saving and beneficial to its community for consumers and business owners alike.
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