Coalition Pushing for Tax Breaks on Marijuana Industry Amid Pandemic

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Coalition Pushing for Tax Breaks on Marijuana Industry Amid Pandemic

A coalition of marijuana companies, churches and advocacy groups is asking California Governor Gavin Newsom for temporary tax breaks for the marijuana industry. This is according to a new report by the Associated Press.

The group includes the California State Conference of the NAACP, Los Angeles Metropolitan Churches and the industry group Southern California Coalition. they warned in a letter to the governor that the coronavirus crisis and a crashing economy will take an especially heavy toll on businesses run by minorities who were disproportionately targeted during the decades-long drug war.

“If action is not taken now many of our business colleagues and friends may be pushed into the gray, or worse, back into the illicit market,” said the letter, dated April 23.

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“At a time where unemployment is at a record high, the legal industry is seeing its customers flock to lower priced cannabis products in the illegal market regardless of quality or safety,” the group said.

“As COVID-19 continues to disproportionately impact communities of color, our social equity businesses and our customers will be impacted even more,” the group warned.

As noted by the AP, the state’s legal marijuana industry has long blamed tax rates that can approach 50% in some areas for driving business into the illicit market. According to some estimates, consumers are spending roughly $3 in the state’s underground pot economy for every $1 in the legal one. Because cannabis remains illegal at the federal level, most banks don’t want to do business with pot companies, and they aren’t included in the federal coronavirus rescue package that will help other businesses.

Other groups that signed the letter included Americans for Safe Access, Black Women’s Cannabis Council, the California Minority Alliance and the National Diversity and Inclusion Cannabis Alliance.

Marijuana was first legalized in California in 2016 through the passage of a citizen’s initiative. The initiative, which took effect the following year, legalized the possession and use of up to an ounce of marijuana, as well as marijuana-infused products such as foods, drinks, tinctures and lotions. The measure also legalized state-licensed marijuana retail outlets, which are authorized to distribute cannabis and cannabis products to anyone 21 and older. At the time, California was one of just a handful of states to have legalized marijuana: Now the number is over 10.

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