California marijuana taxes won’t go up for a year under new bill signed by Gavin Newsom

The California cannabis industry is getting a bit of a tax break, courtesy of the California Legislature.

Gov. Gavin Newsom signed a bill late last week into law that prohibits the California Department of Tax and Fee Administration from adjusting the cannabis excise tax markup amount until July 1, 2021.

The bill also prohibits the cultivation tax rates for the 2021 calendar year from being adjusted for inflation, unless that adjustment would result in an inflation rate less than zero.

Jerred Kiloh, president of the United Cannabis Business Association, said that the bill gives businesses in the cannabis industry “an opportunity to really kind of establish our budgets.”

“Cannabis companies need a way to find out what they are budgeting for,” Kiloh said.

This bill gives the industry effectively a one-year outlook.

“It will give us the ability to understand what our tax liabilities will be like for the next 12 months with no adjustments. That’s what every business needs to know, what are my costs?”

Californians in 2016 voted to legalize recreational marijuana, and retail stores have been open since 2018. The industry still completes with the black market, and it has asked lawmakers for tax relief.

Though Kiloh’s group had lobbied for more legislative fixes for the cannabis industry, he said that freezing the tax rate “is as good a thing a we’re going to get in the current budgetary crisis we have.”

This story was originally published September 22, 2020 at 9:17 AM with the headline "California marijuana taxes won’t go up for a year under new bill signed by Gavin Newsom."