This week, the state of California has dramatically reduced its marijuana tax revenue projections.
The state budget documents were released on Thursday and reveal that Governor Newsom’s administration is cutting back on what it expects to collect in cannabis tax revenue through June 2020.
How big of a cut? A $223-million cut from projections from only four months ago.
California’s state Finance Department believes the excise tax projection was reduced after seeing no growth in the final quarter of 2018.
According to the state’s new Governor, Gavin Newsom, it would take five to seven years for the legal market to reach its potential.
“It takes time to go from something old to something new,” Newsom stated.
“We knew [some counties and cities] would be stubborn in providing access and providing retail locations and that would take even longer than some other states, and that’s exactly what’s happening,” he also said.
Josh Drayton of the California Cannabis Industry Assn. remarked, “I think this administration is being more realistic about the challenges faced by the regulated market.”