Gov. Newsom Signs Bill Freezing Cannabis Tax Rates

On Sept. 18 California Governor Gavin Newsom signed Assembly Bill 1872 (Committee on Budget), a bill that will bring stability to the cannabis industry by guaranteeing there will be no state cannabis tax increases in the new year. Specifically, AB 1872 suspends for one year, beginning Jan. 1, 2021, the California Department of Tax and Fee Administration’s (CDTFA) authority to raise the cannabis cultivation tax and the wholesale mark-up rate for purposes of calculating the excise tax.

AB 1872 was drafted by the California Cannabis Industry Association in close collaboration with the Assembly and Senate budget committees.

Related: Bill To Freeze Cannabis Tax Rates Introduced In California

“We particularly applaud CCIA’s Senior Policy Director, Amy Jenkins, for months of dedicated advocacy and careful negotiation on behalf of the cannabis industry,” read a statement from CCIA. “This bill would not have happened without her. During a time in which so much seems uncertain, AB 1872 will bring peace of mind to California’s tumultuous cannabis industry, and we thank Governor Newsom for his signature on this important piece of legislation.”