California Governor Proposes Changes To Simplify Cannabis Regulations
Big changes are coming to the cannabis industry in California. Battling an illicit market, dealing with high taxes and navigating a complex licensing process have all been challenges the cannabis industry has faced since the state opened its doors to commercial cannabis sales in 2018.
Last Friday, California Governor Gavin Newsom’s administration announced a proposal to simplify the cannabis regulatory system. The administration proposed to consolidate the three cannabis licensing authorities and simplify taxes – something that has been blamed for enabling a black market.
Currently there are three licensing authorities tasked with regulating the cannabis market – the Bureau of Cannabis Control, the Department of Food and Agriculture, and the Department of Public Health.
Newsom’s proposal would consolidate all three departments into a single department called the Department of Cannabis Control by July 2021 in an effort to simplify the regulatory system. More details on this proposal is scheduled for spring 2020.
The administration said in a statement that “establishment of a standalone department with an enforcement arm will centralize and align critical areas to build a successful legal cannabis market, by creating a single point of contact for cannabis licensees and local governments.”
The administration also proposed tax simplification by rearranging the collection of taxes by moving the responsibility for the cultivation excise tax from the final distributor to the first, and for the retail excise tax from the distributor to the retailer.
The United Cannabis Business Association (UCBA) also released a statement in response to Newsom’s proposal. “UCBA looks forward to working closely with the administration to ensure that the intended simplification, especially as we shift the majority of taxation burdens onto retailers alone, does not result in undue burden or complications at the dispensary level and that we keep our eyes on the prize – a safe, stable and accessible legal cannabis market in the golden state.”