Connect with us

Business

California Proposes Cannabis Tax Based on Potency

Published

on

[dropcap class=”kp-dropcap”]C[/dropcap]alifornia may one day begin taxing cannabis based on the potency of specific products if tax analysts have their way.

According to KMJ Now, analysts recommended this approach on Dec. 17 as one possible fix for how expensive cannabis taxes have become in the state. In some cases, the taxes could be placed as high as 50 percent.

This plan, recommended by the Legislative Analyst’s Office, would get rid of and replace the existing tax scheme. In addition to the idea of taxing cannabis based on potency, which they believe would help reduce harmful use, the office suggested a tiered system with different tax rates linked to potency or product types.

The California Cannabis Industry Association said the recommendations mirror priorities that the group’s members have been advocating for over three years, including removing weight-based taxes on cultivation. “As California’s regulated market struggles against a thriving illicit industry, we believe that comprehensive tax reform will incentivize consumers to purchase regulated cannabis products, ease administration and compliance, and increase and stabilize revenues for the state,” the group said.

State Assemblyman Rob Bonta said that these discussions and the data on cannabis taxes in California are evidence that the “status quo” isn’t working. “I continue to believe we must lower and simplify the taxes on cannabis if the regulated cannabis industry in California is to survive, let alone thrive,” Bonta said. He also said that he planned to reintroduce legislation to temporarily reduce pot taxes.

The report suggested that the state consult experts before structuring the details of a potency tax, saying detailed information from a state computer system that tracks sales would be needed to make conclusions. The state could set a lower rate if it wants to reduce the illegal market, or a higher one to raise more tax dollars.

Cannabis taxation has been a debated topic in California for some time. Many areas are doing what they can to lower taxes, and others are expanding their business models with new ideas like the drive-thru. While it may not be popular with all, this could be one way to regulate taxes in the Sunshine State.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *