The legal cannabis market in California is in danger of being extinguished by high taxes and overregulation, industry leaders are telling Gov. Gavin Newsom.
California’s leading companies sent a formal letter to the governor this week begging for changes in laws they say leave them unable to compete with the illegal market.
“Seventy-five percent of cannabis in California is consumed in the illicit market and is untested and unsafe,” the letter reads.
The authors of the letter want Newsom to lift the “cultivation tax” placed on growers, a three-year reprieve from the excise tax and an expansion of retail shops statewide. Currently, only 33 percent of California cities have dispensaries, and it’s up to the individual cities to authorize any sales or production.
“We have been pushed to a breaking point,” the companies wrote.
Newsom appears to be supportive of the group’s efforts.
“It’s clear that the current tax construct is presenting unintended but serious challenges,” said Erin Mellon, a spokeswoman for the governor.