February 11, 2020

Calif. Governor Proposes New Changes in Cannabis Regulation & Taxes

In California, marijuana is legal for both medical & recreational purposes. Medical users enjoy more benefits over recreational users. Governor of California proposes changes in cannabis regulations & taxes. Some of these include—age relaxation, reasonable cannabis products in dispensaries, and legal permission to grow marijuana plants at home.

The State of California supports patients with various conditions to manage their symptoms using amazing cannabinoids of marijuana. The state continues making efforts to make the herb easily accessible for medical users. On Friday, Calif. Governor Gavin Newsom releases the new budget proposal, which contains several provisions and changes for the cannabis industry.

What Does The Governor Proposes New Changes in Cannabis Regulations & Taxes?

Changes in Cannabis Regulation
The Governor Proposes New Changes in Cannabis Regulations & Taxes

The Governor’s most noteworthy proposal is regarding the marijuana licensing system of the state. He proposes consolidating the three different licensing entities (the Bureau of Cannabis Control, the Department of Food and Agriculture, and the Department of Public Health) into a single entity i.e. the Department of Cannabis Control.

“Establishment of a standalone department with an enforcement arm will centralize and align critical areas to build a successful legal cannabis market, by creating a single point of contact for cannabis licensees and local governments,” the administration said.

In addition to the cannabis licensing system, another area that the government plans to make changes is marijuana taxes. The main objective is to simplify the marijuana tax collection process by transferring the responsibility for the cultivation excise tax to the first distributor from the final, and for the retail excise tax to the retailer from the distributor.

Will it help?

Yes! It would allow businesses to simplify the tax collection process and burden by avoiding the need to set wholesale tax rates and estimate product mark-up.

However, other changes to marijuana taxation will be done soon after Newsom discusses other issues and making amendments in taxation with stakeholders, aiming at a safe, legal marijuana market.

The governor’s office estimates to have over $332 million in revenue for distributing to other social services. This will go toward different areas—public safety-related activities ($66.6 million), clean-up and enforcement efforts connected to environmental damages from illicit marijuana cultivation ($66.6 million), and education and prevention for youth substance use disorders and school retention ($199.7 million).

When speaking with Marijuana Moment, Lindsay Robinson, Executive Director of the California Cannabis Industry Association (CCIA), said, “They have been strongly advocating for the streamlining of business operations for cannabis operators for years, and we are finally seeing a budget that reflects an understanding of our challenges, and furthermore provides solutions that will simplify tax collection, ease licensing, and eventually increase access to the regulated market.”

Robinson supports the Governor’s proposal of operating the three licensing entities under one umbrella and thinks that it would increase efficiency & communications. She said, “This proposal also increases the enforcement authority that will be assumed by the new State Department of Cannabis, which is essential in battling against the illicit market while increasing consumer safety, and a policy that the California Cannabis Industry Association has advocated and formally requested of the administration in the prior budget.”

The United Cannabis Business Association (UCBA) also supported the proposal saying that the state’s marijuana industry has struggled to navigate proper regulation of cannabis products since legalization. This has led to the growth of illicit markets and increasing the prices. The new changes will help in simplifying licensing and taxation, thus promoting the growth of the legal marijuana market in the state.

Truly, the new proposal by the Governor in the existing marijuana licensing and tax structure will simplify the distribution processes, thus increasing the access of the regulated market. However, the proposals are not yet final, and the changes will be made based on the latest economic forecasts. Looking forward to the final budget!

Want to access medical marijuana legally in California? Apply for 420 evaluations today!

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