Cuts to California cannabis taxes would harm low-income youths, advocates say

“We’ve heard a lot about the impact to the cannabis industry but have heard little to no impact to those who benefit from these taxes,” a child service provider said.

LOS ANGELES — Amid concerns that California’s cannabis industry is overtaxed and on the brink of collapse, children’s and youth advocates say cutting marijuana taxes could put badly needed social service programs in jeopardy.

Small cannabis farmers and business owners have repeatedly asked the state to overhaul the industry’s tax system as they struggle to stay afloat with rising operating and regulatory costs.

As of Jan. 1, cannabis is taxed at a flat rate of about $161 a pound, on top of a 15 percent excise tax, as well as local cultivation, manufacturing, processing, distribution and retail taxes. The state raked in nearly $1 billion in cannabis tax revenue during the first three quarters of 2021.

Last month, Gov. Gavin Newsom said he supported cannabis tax reform and planned to work with the Legislature to modify policies. Lawmakers have also rallied to support the industry and have already proposed at least one bill that would change the current structure.

Service providers for low-income and at-risk youths say they oppose any cuts, because their programs rely heavily on money collected from Proposition 64, the 2016 ballot initiative that made recreational cannabis legal in California. [Read More @ NBCNews]