Cannabis Law Group's Medical Marijuana Legal Blog
California Cannabis Tax Cuts May Help Ailing Industry
With the state substantially altering its cannabis tax structure, the California cannabis industry is expected to get a substantial tax break, which lawmakers are hoping will boost the legal industry left lagging by competition with illicit sales, extensive bureaucracy, and heavy taxation. 
If the effort is successful, there is a potential for its impact to be global, given that California’s marijuana market is not only the oldest but the largest in the world. Thus, its influence across the industry is oversized.
The taxation changes will effectively erase a tax on cultivation of marijuana (which had been the source of about 15 percent of state marijuana taxes – roughly $166 million as of last year). The changes were part of a larger state budget agreement, which is also going to carve out some tax credits for certain marijuana companies, as well as expand labor rights in the industry and switch collection of a state excise tax from distributors to retailers. The tax will be paused at 15 percent for three years, at which point the state will have the option to raise it again to make up for revenue lost by ending the tax on growers.
Programs that benefit from marijuana taxes include youth and environmental programs, and the state says it must balance out these needs with those of marijuana cultivators and shops that are burdened by heavy taxes and tight regulations. As our Los Angeles marijuana business lawyers are aware, many companies are treading water – if they aren’t drowning – because they’re in direct competition for sales with black market dealers that can sell their products more cheaply because they aren’t taxed or responsible for screening their supply for harmful contaminants. This year especially has been tough, given last year’s bumper crop contributing to oversupply.
Many smaller operators are likely to fail or consolidate before the tax credit goes into effect, but it’s nonetheless a welcome windfall for those in the industry. It’s been largely recognized as an operational burden, as it was paid out by growers prior to obtaining any revenue for sales. So even if that product never sold, cultivators were still getting taxed. Continue reading
Washington, where requirements for marijuana businesses are strict, yet muddled. What started as a residency restriction meant to control big outside mega corporations from putting local businesses at a disadvantage has led to corporations researching ways to exploit residency loopholes and limiting who longtime residents can bring on as partners. Now, due to unclear definition of what qualifies a person for residency, some are concerned how to prove their status.
on a U.S. stock exchange by a marijuana producer. Ontario, Canada-based cannabis conglomerate Tilray went public on New York NASDAQ recently. The stock price spiked 30 percent in one day proving what we have been saying all along: cannabis is very, very good for business. According to a report from 
business owners. Some legislators agree, but others think the higher taxes should stand, at least for a while longer. For now, the current tax rate will remain, as an assembly bill addressing cannabis taxation failed to advance out of committee, according to an 