California Governor Proposes Marijuana Tax Cuts To Combat Illicit Market


The governor of California has recently unraveled an updated budget proposal this Friday about the elimination of the state’s marijuana cultivation tax and also revised the cannabis tax revenue allocations. Gov. Gavin Newsom’s (D) May revised the budget and has taken the right steps to combat the illicit market, making it way more competitive.

This move is mostly for the stakeholders to improve their business, considering the rising inflation and demand compared to the peak pandemic. The governor has promised to explore different ways to minimize this inflation.

California Governor Proposes Marijuana Tax Cuts To Combat Illicit Market 3

A recent analysis from the survey at the Reason Foundation witnessed that the monthly tax revenue will increase by 123% by 2024 if this policy change is enacted well. The report also mentioned that eliminating cultivation taxes will lower the costs for consumers resulting in higher purchases of recreational cannabis.

The governor’s revised budget proposal as stated is also about various updated estimates on the tax revenue allocations for the 2022-23 fiscal year. The state is eventually planning to distribute on different aspects of the state regarding cannabis manufacturing. About $411.8 million is allotted for education and youth substance misuse treatment. It will also contribute $133.9 million for environmental clean-up related to illicit cannabis manufacturing and $133.9 for law enforcement purposes.

Last year, the state also awarded about $29 million in grants to 58 different non-profit organizations for righting the wrongs of the war on drugs. Officials with the Californian organizations are working actively in sanctioning different proposals for cannabis tax-funded programs in the next few years, just like the California Department of Fish and Wildlife for helping small marijuana cultivators with various environmental clean-up and restoration measures.