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Craft cannabis industry in California is ‘on the brink of collapse,’ advocates say

People walk past the Artist Tree — West Hollywood Dispensary in West Hollywood, Calif., on Nov. 4.Allen J. Schaben / Los Angeles Times via Getty Images file

Small cannabis growers and operators say the state’s hefty taxes are shutting them out despite promises to expand the industry and make it more inclusive.

Cannabis advocates, small farmers and business owners called Thursday for an overhaul of the California marijuana tax system as they struggle to keep afloat amid rising operating and regulatory costs.

They gathered outside the State Capitol in Sacramento to make their case and warn that the industry could collapse if steps aren’t taken soon.

“We’re here today because the craft cannabis industry here in California is in crisis and on the brink of collapse,” said Amber Senter, a co-founder and the executive director of Supernova Women, a nonprofit organization that works to create opportunities for people of color in the industry.

“Not only has the state fallen short in promises to right the wrongs inflicted upon Black and brown communities impacted by the war on drugs, but it has also perpetuated regressive war-on-drugs 2.0 policies through oppressive taxation, which must end,” Senter said in a statement. “This is our cry and plea for help.”

Senter and others are asking the Legislature and Gov. Gavin Newsom to eliminate the cultivation tax and repeal the state’s excise tax for social equity retailers.

Thursday’s rally built on momentum created by industry leaders who also demand that California change the way it taxes cannabis. Last month, marijuana companies warned Newsom in a letter that immediate tax cuts and a rapid expansion of retail outlets were needed to steady an increasingly unstable marketplace shaken by illicit dealers and growers.

More than two dozen cannabis executives and legalization advocates signed the letter after years of complaints that the heavily taxed industry is unable to compete with the widespread illegal economy, which offers far lower consumer prices and has double or triple the sales of the legal market.

Proposition 64, which voters approved in 2016 and legalized cannabis, “was not passed simply to raise tax revenue, but to end the illicit market, protect public health and safety, and create an accountable legal industry,” the executives said in the letter. “Yet today, four years after the start of legal sales, our industry is collapsing and our global leadership and legacy is at the brink of disappearing forever.

To Read The Rest Of This Article By Alicia Victoria Lozano on NBC News

Published: January 17, 2022

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