California's cannabis industry faces a tax increase from 15% to 19% this July, prompting Assemblyman Matt Haney to introduce AB 564, the Cannabis Tax Relief bill. This legislation aims to pause the tax hike amid concerns that increased costs could drive consumers to the unregulated market. According to cannabis industry professionals, high taxes constitute 30% to 40% of product prices, making legal options less appealing. Haney's initiative, alongside his previous bill allowing cannabis cafes, seeks to bolster revenues and safeguard licensed dispensaries from the growing illicit trade.
The illicit or unregulated market is the biggest competition. Our biggest competitors are not each other, but rather a market that's unregulated.
Continuing to make regulated cannabis more expensive causes us to lose over half the market, which jeopardizes the safe space consumers supported with Prop. 64.
I'm introducing the Cannabis Tax Relief bill to protect legal cannabis businesses from closing as the illegal market grows.
Many customers complain about high taxes on cannabis products, which can make up about 30% to 40% of the overall price.
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