California may be getting a lower tax rate for marijuana sales, but only temporarily.
The state legislature is considering passing a bill that would temporarily grant a tax break to legal marijuana retailers.
The bill, called Assembly Bill 286, and also known as the Temporary Cannabis Tax Reduction Bill, would cut California’s excise taxes for legal marijuana retailers from 15% to 11% for three years. The bill would also stop a cultivation tax altogether for growers until 2022.
In its first tax revenue for the industry, the Legislative Analyst’s Office has reported that the industry brought in $84 million in tax revenue. This was $101 million below what expected, in the first six months of 2018.
BDS Analytics has said that Californians spent $500 million less on legal marijuana than they did in 2017. The drug wasn’t even recreationally legal in 2017.
“We need to do better,” Treasurer Fiona Ma said, according to a report from North Bay Business Journal. “This is anywhere from a $6 billion to a $20 billion industry in California. So we want to help them … get into the regulated market and come in from the gray market.”
