Help for California’s fledgling cannabis industry finally appears to be on the way. For years, the industry has shouldered heavy taxes – a 15% state-wide excise tax, sales and use taxes up to 10.75%, and local business licenses taxes up to 15% in some jurisdictions. And, to top it off, California imposed a cultivation tax on cannabis flowers of $161.28 per dry-weight pound. While growers could sustain this tax burden when business was good, wholesale prices plummeted in the fall of 2021 and left growers unable to turn a profit.
Residents of California often complain about high taxes, but no one pays higher taxes than the cannabis industry. In addition to the Federal 280E penalties, the cannabis industry in California is subject to a 15% state-wide excise tax, sales and use taxes that can reach up to 10.75%, and local business licenses taxes which are as high as 15% in some jurisdictions. On top of these excise taxes, which combined can approach 40%, there is a state cultivation tax currently imposed on cannabis flowers at a rate of $161.28/dry-weight pound (and some local jurisdictions impose additional cultivation taxes). …
Continue Reading California Cannabis Farmers May Finally Get Some Relief
For many in the cannabis industry, April 1, 2022 is seen as a day of reckoning following the July 2021 passage of Assembly Bill 141 and Senate Bill 160 (collectively, the Cannabis Trailer Bill). In an attempt to transition to an annual licensure program, April 1st marked the beginning of the end for provisional cannabis licensure. It also ushered in significant changes to renewal process for previously granted provisional licenses. These modifications now require applicants to comply with the California Environmental Quality Act (Pub. Res. Code §§ 21000 et seq.) (CEQA), a complex statewide policy of environmental protection fraught with potential traps for those unversed in the law, before an operator is eligible to be awarded a cannabis state license. This requirement alone carries the potential to create a much higher barrier to entrance into the cannabis market.
Continue Reading No April Fools: Starting April 1st, Cannabis Operators Face CEQA Compliance Requirements for State Licenses
In a win for much of the booming hemp products industry, on October 6, 2021, California Governor Gavin Newsom signed AB-45 into law. AB-45 is comprehensive legislation that regulates and legitimizes many industrial hemp products. The law excludes from the list of permissible products inhalable hemp products. The law takes effect immediately and supersedes the California Department of Public Health’s (CDPH) 2018 “FAQ” guidance on hemp-derived CBD in food, beverages, dietary supplements, and pet food. The new law allows for the inclusion of hemp and cannabinoids (e.g., CBD), extracts, or derivatives of hemp in food and beverages, dietary supplements, cosmetics, and pet food.
Continue Reading AB-45: California Finally Welcomes Hemp Products To The Marketplace