Governor Gavin Newsom of California has signed eight laws meant to improve upon the 2016 ballot initiative that legalized recreational marijuana statewide. While California’s cannabis industry has been flourishing, businesses have faced continued obstacles with taxes, competing with the black market and accessing banking. These laws, coming in the final moments of the legislative year, are designed to solve these issues and more.
Here is more information about a few of them:
Marijuana businesses will be able to claim state tax deductions. "Due to anti-drug trafficking policies at the federal level, legal cannabis businesses are not able to make any deductions when paying taxes, which means they are taxed at higher rates than any other type of legal business in the state of California,” said Assemblymember Jones-Sawyer. “AB 37 will end the cannabis prohibition on businesses for the purpose of filing state taxes, helping legal businesses thrive."
Among those deductions entitled to businesses are salaries, rent, utilities, employee benefits, marketing, repairs, and office expenses. "The people of California have spoken and legalized the recreational use of cannabis and we should do everything we can to help the legal cannabis industry,” said Assemblymember Jones-Sawyer. “In my district, too many illegal cannabis businesses thrive because they don’t play by the rules, AB 37 will play a vital role in leveling the playing field for legal cannabis businesses."
Rather than having cannabis products be “remediated or destroyed” if they failed a contaminant lab test, marijuana companies will now be allowed to correct minor issues and re-test their products.
Using those products in healthcare facilities was a proposal in a bill vetoed by Gov. Newsom. The law would have permitted the use of medical marijuana on-site for terminally ill patients. “The bill would create significant conflicts between federal and state laws that cannot be taken lightly,” said Gov. Newsom.
Senator Scott Wiener, D-San Francisco, introduced a bill that allows cannabis businesses to donate their product to medical marijuana patients. "Low income individuals, including veterans and people living with HIV, are suffering right now because they cannot access their medication due to these ridiculous taxes,” said Sen. Wiener. “Compassion programs save lives by providing free medicine to people in need. We should not burden these programs with taxes meant for businesses, and we should not force people with serious health problems onto the unregulated cannabis market. Today we are one step closer to ensuring more individuals have access to vital medication."
For areas affected by the War on Drugs, a bill mandates cannabis licensers to begin by 2021 a need-based fee deferral or waiver program. This aims to extend opportunities to enter the marijuana industry to those communities. A Senate floor analysis of the bill confirmed that 60 percent of the program’s waivers and fee deferrals “must be allocated to equity applicants and licensees.”
According to Drug Policy Alliance, the bill’s co-sponsor, the program will “remedy the failures of the drug war by ensuring that applicants with prior convictions, communities that have been overpoliced, and communities where poverty is significant are able to enter the burgeoning industry.” The organization continued: “The state plays a pivotal role to ensure that the conditions exist to create an equitable cannabis industry reflecting the broad diversity of California.”