Representatives of California NORML are criticizing regulators’ decision to increase cannabis tax rates in 2022, calling the move “wrong-headed and untimely.”
In a press release issued by the state affiliate today, NORML Board Member and California NORML Director Dale Gieringer said that the legal cannabis market in California is already “burdened by excessive taxes and regulation. … California needs to be reducing, not increasing cannabis taxes to make the legal market more competitive.”
The California Department of Taxation and Fee Administration announced that the cultivation tax on the commercial production of legal cannabis will increase as of January 1, 2022. Personal cultivation is not subject to taxation in California.
NORML has long cautioned that excessive taxes on retail cannabis products “incentivizes consumers to obtain cannabis from the illicit or grey market.” Studies show that most consumers are comfortable paying a premium price for cannabis available legally at retail stores (up to approximately $14 per gram), but warn that artificially high pricing due to heavy taxation induces some consumers to return to the illegal market.
A 2020 poll of California NORML members reported that consumers desire lower taxes on cannabis, with 76 percent of respondents naming it as their top legislative priority.
Said Dale Gieringer: “California has no need for further cannabis tax money. The Legislative Analyst’s Office has estimated that the state will have a budget surplus of $31 billion next year. The cultivation tax is particularly onerous and cumbersome to administer. We urge that it be eliminated.”
Additional information is available from California NORML. A state-by-state summary of adult-use marijuana tax rates is available from The Tax Foundation here.
