California Marijuana Tax Revenue Nears $4 Billion, But Growth Has Stalled, State Analysts Say

California has taken in nearly $4 billion in marijuana tax revenue since launching the state’s adult-use market in 2018, the Department of Tax and Fee Administration (CDTFA) reported Thursday. But the figures for the past year and a half are “stable”, legislative analysts reported.

For the first quarter of 2022, the state recorded approximately $294 million in cannabis revenue generated from excise, cultivation, and sales tax on marijuana.

While that’s less than what California collected in the fourth fiscal quarter of 2021, when it received an estimated $317 million in cannabis tax dollars, it’s also true that the numbers are regularly updated. after initial publication due to “amended and late filings and other tax filing adjustments”. », CDTFA said.

Marijuana tax policy in the Golden State has been the focus of attention from stakeholders, regulators and even the governor in recent months.

For example, Gov. Gavin Newsom (D) unveiled an updated budget proposal earlier this month that calls for eliminating the state’s marijuana grow tax and revising allowances. cannabis tax revenue.

May’s revised budget would take steps to tackle the illicit market and make the legal industry more competitive, largely by reversing the grow tax that marijuana companies currently incur.

As the state’s Legislative Analyst’s Office (LAO) pointed out in its own update On Thursday, Newsom’s proposal also calls for setting monetary thresholds for cannabis tax-funded programs and setting aside any excess revenue.

LAO called the state’s marijuana tax consumption “stable” over the past year and a half, saying that while California cannabis revenues grew “very rapidly in the first quarter of fiscal 2020- 21”, they have “not increased at all”. from.

That said, the nonpartisan agency said it’s “unclear” whether the state will see any excess revenue under the governor’s plan in the 2021-22 fiscal year.

California collected about $817 million in adult marijuana tax revenue last fiscal year. This represented 55% more cannabis revenue for state coffers than was generated in the 2020-2021 period.

Meanwhile, state officials launched a new resource on Thursday, providing people with an interactive map of where marijuana businesses are allowed — and where they can’t open — across the state.

The tool draws attention to the fact that more than half of cities and counties in the state do not allow any type of cannabis licensee to operate in their area, which advocates say is a problem that has allowed the illicit market to thrive despite voter-approved legalization. .

The Department of Cannabis Control’s (DCC) map doesn’t show where to find open dispensaries per se (though the agency has a separate online resource where consumers can find individual licensing businesses). But it breaks down the number of cities in a given county that license retailers, distributors, manufacturers, growers and testing facilities.

Newsom’s revised budget also calls for the creation of a “local cannabis jurisdiction retail access grant program” to support the development and implementation of local retail licensing efforts. The $20.5 million for this program would come from the state’s general fund. Localities that license equity seekers could receive additional funding.

The governor said this month that the aim of the initiative was to “address the persistent problem which is exactly what we expected to be a persistent problem – and which deals with the black market, going after producers illegals and illegal operators”.

California officials also announced in January that the state had provided $100 million in funding to help develop local marijuana markets, in part by securing a full license for cannabis businesses.

DCC distributed the funds to 17 cities and counties where there are a disproportionate number of provisional marijuana licenses, rather than full-year licenses. The department first announced that applications for the Local Jurisdiction Assistance Grant program opened in October.

Also last year, the state said it was giving about $29 million in grants to 58 nonprofits, in an effort to right the wrongs of the war on drugs. Funding is provided through the California Community Reinvestment Grants (CalCRG) program.

Grants are awarded to eligible nonprofit organizations to support programs aimed at providing job placement, mental health treatment, addiction treatment, and legal services to disproportionately affected communities. The program was first announced in April 2020 and applications for these grants initially opened in September 2020.

California Department of Fish and Wildlife officials also said last year they were seeking concept proposals for a cannabis tax-funded program to help small-scale marijuana growers with cleanup and restoration efforts. of the environment.

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