In 2015 history was made. A robust collaborative effort resulted in breakthrough bi partisan legislation to regulate commercial medical cannabis activity in the state of California for the first time in 19 years.
Working together the state of California took a seminal step toward a well regulated, healthy, sustainable, and prosperous cannabis industry.
This breakthrough has opened the door to discussions of an excise tax to be levied on medical cannabis.
If the tax rate is set too high, there is a very real danger that business that pay their taxes will be at a significant disadvantage to those that don’t. Our members generally support an excise tax on medical cannabis. However, we insist that an excise tax be developed in a thoughtful and considerate manner.
We seek the creation of a fair and efficient excise tax for medical cannabis.
2016 policy priorities:
- New state taxes should be limited to no more than 5% in 2016
- New state taxes should be collected from the distributor
- State taxes should be a flat rate tax, not an ad-valorem tax
Cumulative tax Liability.
It is a basic principle of our membership that all tax proposals must be considered cumulatively. Tax proposal should not be analyzed in a vacuum, rather analysis should consider existing sales tax and special local taxes when considering the impact to the business community and patients.
Avoid disrupting implementation.
Given the nature of the transition that the cannabis business community is facing in California, we would prefer to set the tax rate lower and increase over time as the regulated marketplace becomes more stable.
Take A streamlined approach.
The distributor model that the MMRSA is a built on provides an ideal structure for efficient and streamlined collection of taxes. We strongly encourage policy makers to build on this foundation of accountability and transparency. Building on the regulatory framework established will streamline business operations and allow our members to focus on their business.