California Cannabis Tax Reform Coming

With six separate bills addressing cannabis tax reform – AB 2506 (Quirk/Lackey), AB 2792 (B. Rubio), SB 1074 (McGuire), SB 1281 (Bradford), SB 1293 (Bradford), and SB 1336 (Wiener) – introduced in the California Legislature this session, and after seeing the Governor’s May Revision to the Budget last week, it’s safe to say we can look forward to some cannabis tax reform this year in the Golden State, while its depth and breadth remain an intense focus of industry advocacy. (The legislative session ends August 31 for the above-listed six bills.) On the budget side, where state lawmakers have until June 15 to send a budget plan to Newsom’s desk for the fiscal year that begins July 1, we can expect at least some tax reform, including elimination of the cultivation tax where Governor Newsom and state lawmakers broadly agree. On May 4, the Reason Foundation published a report recommending a repeal of the cultivation tax, among other cannabis tax reform measures lawmakers are considering this year to drive consumers away from the illicit cannabis market where nearly 2/3 of California’s cannabis sales continue to take place.