Cannabis industry on brink of shutting down, business leaders say

by Ashley Zavala for Fox 40 Sacramento

SACRAMENTO, Calif. (KTXL) — Cannabis industry leaders are demanding California lawmakers cut some taxes and regulations for the legal market, which they said is on the brink of shutting down.

Standing next to a slouching marijuana plant, cannabis growers and sellers rallied for relief.

“State of California, we are tired of the rhetoric,” business owner Kika Keith said.

“The unfair taxation ends the dream for so many small farms and businesses,” grower Casey O’Neill said.

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Urban shop owners and rural cannabis growers are urging for the excise and cultivation taxes to be repealed, calling them burdensome. They said they add to the price of their legal products while consumers lean toward the illegal market for lower costs.

According to industry leaders, regulations, such as needing a storefront before getting a marijuana license in some places, aren’t fair for small shop owners in Black and brown communities.

“My pathway to licensure took over three years and over $400,000 in rent while waiting on regulators and bureaucratic delays,” Keith said.

Security is another major issue for legal sellers. They said they legally can not have bank accounts, making them targets for big cash robberies.

“Our business has been broken into five times by five different groups of individuals. They took everything,” business owner Henry Alston said.

State Sen. Steven Bradford, D-Gardena, stood with the group. He said he is working with legislative leaders for change, but what exactly will change is yet to be determined.

“We could suspend the tax for the period of time or reduce it for a period of time. Again one of the things we really need to look at is the requirement by a lot of local jurisdictions for you to have a brick and mortar facility before you can get a license — it makes no sense,” Bradford said.

Some lawmakers and the governor agree they must work together on a solution. Gov. Gavin Newsom weighed in on the calls from the cannabis industry earlier this week.

“We have a lot of work to do in this space,” Newsom said.

Newsom noted the state expects to bring in $787 million from the industry at the current tax rates. Portions of that will go to youth services, land acquisitions and law enforcement.

He said any reforms will need to be considered.

“It is my goal to look at tax policy to stabilize the market. At the same time, it’s my goal to get these municipalities to wake up to the opportunities to get rid of the illegal market,” Newsom said.

State leaders hope to help this legislative session, but how soon is to be determined.

See full story here.