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Gavin Newsom gets behind marijuana tax reform, signaling change to cannabis industry

Marijuana grows at the Ohana Gardens Collective, a medical cannabis cultivation and delivery business, in 2017. ANDREW SENG SACRAMENTO BEE FILE

Facing a possible industry revolt over California cannabis tax structure, Gov. Gavin Newsom on Monday signaled that he is open to rethinking the taxes the state levels on marijuana growers and purchases.

The governor included in a budget proposal he released this week that he “supports cannabis tax reform and plans to work with the Legislature to make modifications to California’s cannabis tax policy to help stabilize the market.”

Asked to expand on the language at a press conference, Newsom said, “There was intention by having that language in the budget. It is my goal to look at tax policy to stabilize the market.”

Newsom’s budget projects that the state will collect $787 million in cannabis revenue during the 2022-23 tax year. Of that, the budget estimates that nearly $595 million will be available to be allocated to youth substance abuse treatment, clean-up of illicit cannabis grows and support public safety-related activities.

It’s been a bumpy road for legal cannabis in California since voters approved adult-use sales in 2016. Cannabis activity, including cultivation, distribution and retail, remains outlawed in much of the state, as cities and counties have been reluctant to authorize such activities.

Newsom said his goal is “to get these municipalities to wake up to the opportunities to get rid of the illegal market and the illicit market and provide support and a regulatory framework for the legal market.”

Newsom’s statements, and budget proposal, came as welcome news to Elizabeth Ashford, vice president of communications for Eaze, a cannabis delivery company. Ashford previously worked for Govs. Jerry Brown and Arnold Schwarzenegger.

“I think Gov. Newsom knows and his advisers know that they can’t let the legal market fail,” Ashford said in a telephone interview after Newsom unveiled his budget proposal. “It’s extremely important that the steps that state government can take are taken. They need to take these steps.”

To Read The Rest Of This Article By Andrew Sheeler on The Sacramento Bee

Published: January 11, 2022

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