[[“value”:”Marijuana dispensary located in San Bernardino County, January 9, 2022. Credit: Photo by Regina B. Wilson, California Black Media
By Edward Henderson, California Black Media
Licensed marijuana store owners across California are backing a bill making its way through the State Legislature.
Authored by Assemblymember Matt Haney (D-San Francisco), Assembly Bill (AB) 564 seeks to suspend a pending tax increase on cannabis from 15% to 19%, which is scheduled to take effect on July 1.
“If we continue to pile on more taxes and fees onto our struggling small cannabis businesses, California’s cannabis culture is under serious threat of extinction,” Haney said in a press release. “Instead, we should be looking at how we can support this industry which has barely been given a chance to survive after legalization. If we want to support our cannabis industry that drives millions of visitors to California every year, adding more costs makes absolutely no sense.”
Across California, illicit cannabis sales account for an estimated 60 percent of the state’s overall marijuana market, putting legal operators at a clear disadvantage and giving other states an opportunity take the lead in a market that is expected to grow to $76 billion in annual revenue nationwide by 2030.
Black cannabis store owners account for about 4% of all store owners, according to Cannaclusive, an L.A. based marketing and advocacy group that represents the interests of minority marijuana store owners.
In Los Angeles, for example, the United Cannabis Business Association recently polled 245 retailers and found that 70% of them said they were at risk of going out of business.
Overall, conditions have become so difficult in California that the number of inactive and surrendered pot licenses in the state recently surpassed the number of active ones.
The demographic most disproportionately impacted by the red tape and high taxes surrounding the cannabis industry are Black business owners.
In 2017, Los Angeles politicians painted an optimistic picture of a social equity program aimed at creating opportunities for disadvantaged business owners in the cannabis space (race-based programs are illegal under California law). Local governments across the state have launched social equity programs, and the state’s Department of Cannabis Control has awarded nearly $100 million to local governments with social equity programs to help get cannabis business owners fully permitted. The city of Los Angeles was awarded $22.3 million, more than any other local government. However, even this state funding has become a local controversy.
Several Black business owners were present at the latest L.A. Cannabis Regulation Commission meeting to voice their concerns.
“I’m actually fighting back the tears because I actually believed in this program,” said Osajefu Oyadeye, a licensed business owner from Los Angeles, said at the meeting.
“I wanted this industry to thrive in this city where I’ve been a resident all my life. If the social equity program isn’t reparations for the war that was fought against me and those like me in my community, then what is it?” Oyadeye continued.
Asia Allen has been in business four years and while her dispensary makes $120,000 a month, after taxes, fees and payroll she is only left with a $2,000 profit. This is before purchasing product to stock the dispensary, she said.
“I’m so busy trying to keep up with taxes, and payroll and rent, and pay my people, I can’t survive like this. We can’t survive like this. We need your help,” Allen told the council.
As cannabis business owners California seek policy support from Sacramento to find a way forward, opposition to Haney’s bill continues to gather.
Organizations like Youth Forward, Child Action Inc. and Indigenous Justice say suspending the tax would break promises made to the Californians they represent who were ensured by policymakers that a portion of the money raised from the sale of marijuana would be invested into health and social programs.
Even Getting it Right from the Start — an organization that bills itself as being devoted to developing “optimal cannabis policy –opposes AB 564. That group argues that eliminating the tax would favor the cannabis industry over the needs of children.
“California’s cannabis taxes are far lower than states like Washington and fund critical services for kids, the environment, and public safety,” said Dr. Lynn Silver, a pediatrician and senior advisor at Getting it Right from the Start, in a press release. “Proposition 64 promised to invest in healthier communities. With a significant budget deficit and federal funding for children and environmental programs dwindling, now is the time to protect, not slash, these critical investments.”
Last week, AB 564 was ordered to a third reading in the Assembly Appropriations Committee after committee members voted 13-0 to approve it with amendments.
On May 5, the Assembly Revenue and Taxation Committee voted 6-0 to advance the bill with one member counted as a no-vote.
Oyadeye says the state and local governments benefit by supporting struggling marijuana dispensary business owners.
“You’re pushing the people who want to shop legally into the illicit market. The higher the taxes are, the more the customers will go to the illicit market,” he stated.
“]] Licensed marijuana store owners across California are backing a bill making its way through the State Legislature. Read More
