California State Legislators Target Cannabis Taxes With AB1948

The state’s leading reform organizations are in support of AB 1948

As the state’s legal cannabis industry continues to float on top of an underground market three times its size, the debate has again kicked off around lowering California’s pot taxes to make legal marijuana more competitive with its readily available tax-free alternative. 

And with the number of communities that don’t even have proper access to marijuana in California two years after legal sales began, it’s easy to see why people aren’t making the drive to the store for their pot, never mind how much more expensive it is once you add taxes.

In an attempt to put a little wind back in the cannabis industry’s sails, lawmakers in Sacramento began an effort to lower the state’s cannabis taxes for the third year in a row. Assembly Bill 1948 would eliminate cultivation taxes and lower the state excise tax from 15 percent to 11 percent for three years. 

California NORML said last year’s tax-reduction bill AB 286 stalled pending a newly released Legislative Analyst’s Office report that recommends major changes to the state’s cannabis tax structure. What may help this year’s effort is the fact that the report used 11 percent as a possible tax rate — just like AB1948. Analysts found that while the new rate could lower tax revenue in the short term, it would give legal operators a better chance against black-market weed that’s significantly cheaper. 

The general goals of the LAO report were to undercut illicit market prices, making sure California is actually creating a situation to drive revenue, and preventing kids from getting their hands on marijuana. 

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