In 2016, voters in California passed Proposition 64, creating a taxed and regulated adult-use recreational cannabis marketplace and establishing protections for cultivation, possession, and sales
One week ago today, California Governor Gavin Newsom proposed a temporary suspension of the state’s cannabis cultivation tax currently assessed on every ounce of flower,
Cannabis is woven into the cultural fabric of California generally and the Los Angeles area specifically, alternately glamorized and stigmatized through the music, television, and
While it is true that Prop 64 dictated that burdensome taxes still be applied even to cannabis produced specifically for compassionate donations, grassroots activists refused to take that as a final answer. Even though the state’s former governor, Jerry Brown, vetoed a bill on his way out the door in 2018 that would have eliminated these taxes on such products, tireless advocates persisted, and nearly identical legislation was signed by Gov. Newsom in 2019.
There is a flood coming and it is going to last way more than 40 days and 40 nights. Before you start filling sandbags and stockpiling canned goods, though, be aware that the flood we are talking about has nothing to do with water or the weather. No, we are talking about a flood of boofy midgrade weed cultivated on a massive scale by investor-backed BizCon bois who wouldn’t recognize cannabis culture if they tripped over it.
This shit is simple – as long as the state has even one weed dollar in their wallet and has yet to expunge EVERY SINGLE low-level cannabis crime from every resident’s record, they are the damn criminals. The way we see it, they are taxing the plant just enough to keep the vast majority of the industry short of financial freedom and to keep prices just high enough that the prohibitionists still in power can hang their hat on the false pretense of “deterrence”. The truth is, they can do without our billion dollars a year as long as no potheads make a million dollars a year.
There are many reasons why we think that wholesale prices for cannabis will continue trending upward well into 2020. Is this a good thing? Well, that probably depends on who you ask. Growers making more money is a good thing. But what if it comes with higher risk as well? Consumers are already shunning dispensaries due to high retail prices, so those can’t really go higher to make up for the higher wholesale prices, which is cool but it could cut into the margins of the dispensaries. $100 wholesale pounds sound like a surefire way to keep any discerning cannabis consumer far, far away from any regulated outlet. Lower the taxes at all links along the supply chain and lower the costly barriers of entry that currently keep so many legacy operators from entering the industry and maybe, just maybe, Cali can begin to live up to its potential as the largest legal cannabis marketplace on the planet.
Governor Newsom took office riding a wave of support from cannabis consumers convinced that he would make right what Prop 64 got so terribly wrong. His track record on the issue has not been perfect so far, but this week’s flurry of signatures on successful cannabis legislation should show that the fight is not over yet and although he may not be the most reliable ally, he is certainly not the enemy. The battle begins anew the second week of January with the state’s next legislative session.
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