MARCH 2022 - Capitol Corner
The Legislature met its bill introduction deadline on February 18th for the 2022 legislative session.
While we are seeing a lot of the same type of cannabis legislation, such as packaging, compassionate care and hemp regulation – we have seen a notable number of tax reform bills in both Houses. This is coming off the Governor’s January proposal to work with stakeholders on an equitable tax reform.
Below are the cannabis tax measures introduced to date:
AB 2506 (Quirk) - This bill would suspend the imposition of the cultivation tax from July 1, 2023, to July 1, 2028, and would discontinue the requirement that the department adjust the cultivation tax rate for inflation for the 2023 calendar year and during the suspension. The bill would increase, from July 1, 2023, until July 1, 2028, the excise tax by an additional percentage that the Department of Finance estimates will generate the amount of revenue that would have been collected pursuant to the cultivation tax.
AB 2691 (Wood) - Would require the Department of Cannabis Control to issue temporary cultivator event retail licenses that authorize the license holder to sell cannabis or cannabis products, containing cannabis cultivated by that licensee, at cannabis events in the state. The bill would authorize a licensee who holds a valid state cultivation license and a valid license, permit, or other authorization for cannabis cultivation issued by a local jurisdiction, and who cultivates no more than one acre of cannabis, as provided, to apply for a temporary cultivator event retail license. The bill would require a temporary cultivator event retail licensee to comply with all requirements imposed on cannabis retailers, unless otherwise specified.
AB 2792 (B. Rubio) - The bill, from July 1, 2022, to July 1, 2025, inclusive, would suspend the imposition of the excise tax upon purchasers of cannabis or cannabis products sold in this state by licensees eligible for a fee waiver or deferral pursuant to the program established by the Department of Cannabis Control under the California Cannabis Equity Act.
SB 1074 (McGuire) - The bill would increase, from July 1, 2025, until July 1, 2026, the excise tax by an additional percentage that the Department of Finance estimates will generate half the amount of revenue that would have been collected pursuant to the cultivation tax, and would, beginning July 1, 2026, instead increase the excise tax by an additional percentage estimated by the department to generate the full amount of revenue that would have been collected pursuant to the cultivation tax.
SB 1281 (Bradford) - This bill would discontinue the imposition of the cultivation tax, would reduce the excise tax to 5%, and would remove the mark-up from the definition of average market price in an arm’s length transaction. The bill would remove the requirement that the distributor collect the excise tax from the cannabis retailer, and would instead require the cannabis retailer to remit the excise tax to the department. The bill would make these provisions effective beginning January 1, 2023.
We will continue to monitor all relevant cannabis legislation and update MCCIA membership during the legislative session.