 After years of begging lawmakers to do something about the exhorbitant cannabis taxes in California, this month marked the begining of some tax changes due to a law that was just signed, effective immediately.
On the surface it sounds good…. the new bill removes the 15% excise tax from cutltivators, giving them some much needed relief. However, the tax doesn’t dissappear completely, the bill just moves that excise tax onto the retail establishments to collect, meaning the customer will still be paying it. Jerred Kiloh is a dispensary owner, and president of the United Cannabis Business Association, which is a group lobbys for cannabis retailers. He pointed out that this tax shift will actually end up being a tax increase for the consumers. The 15% excise tax on cultivators was at the wholesale point, but retailers will be assessed the 15% excise tax on the retail product, which is roughly double the wholesale price. That means customers will end up paying FAR more excise tax than when it was charged at the wholesale point. Jerred Kiloh said this change will translate to, “…about an 11 to 15 percent excise tax rate increase” to the customer’s pocketbook. And that much more money for the state. So it’s no wonder they were happy to pass this, despite having a historic budget surplus of nearly $100 billion. The state’s 15% excise tax will remain in place for at least another three years. Further, the bill allows the state Department of Tax and Fee Administration to increase the excise tax every two years after July 1, 2025. Comments are closed.
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