taxes

Maine's Legislature Proposes Progressive Marijuana Production Tax

Most state regulators tax marijuana producers based on the quantity or a fixed rate applied to the square footage of the canopy growth. Maine wants to change this approach. Maine’s Committee on Taxation will hold a public hearing on Thursday, April 18th, 2019 on a bill that will charge marijuana producer’s 15% of the average market price that is determined by the state. The tax will not apply to vertically integrated marijuana producers.

Maine’s approach is novel. The industry can benefit from a transparent market prices. We are most concerned about the transparency and fairness of the approach used to generate the average market price, and the likelihood of manipulation. The legislation states that the department will determine an average quarterly market price for flower, trim, immature plants and seeks. The bill fails to address how the average market price is calculated per category including the look back period; the initial pricing used to create the average market price; how changes in local conditions are incorporated; and how the producers use the average market price to assess taxes to be paid. These details should be provided so that producers can adequately assess the changes to cash flow, the certainty of which a flat rate provides.

California: 7 Cannabis Bills Vetoed Including Donated Cannabis and Common Space

California Governor Jerry Brown vetoed 7 cannabis bills including one allowing dispensaries to donate cannabis to patients, which is surprising given the level of public support and precedence in other states such as Washington.

The reasons cited for the Governor’s vetos showed a general deference to the cannabis regulatory agencies. So long as the regulatory agencies take action, the Governor’s approach may work as the industry will be able to provide meaningful input into the final rules.

Below is a description of the bills along with the Governor’s reason reason for vetoing.

  • AB-1863: Personal income tax: deduction: commercial cannabis activity: The bill provided individuals with the ability to deduct expenses associated with a cannabis business. Governor Brown vetoed the bill indicating that it should be considered as a part of the budget process due to the cost to the General Fund.

  • SB 829: Cannabis: Donations: The compassionate care bill permitted dispensaries to provide free marijuana products to medical marijuana patients. Governor Brown vetoed the bill indicating that it conflicted with the Control, Regulate and Tax Adult Use of Marijuana Act, and undermined the rules and the intent of voters. The bill is currently being considered by California’s Senate, and will need a 2/3 vote to become law.

  • AB-2255: Cannabis: distribution: deliveries: violations: The bill prohibits a licensed distributor from transporting marijuana product that exceeds the shipping manifest, and requires presentation of the shipping manifest upon request. The bill authorized law enforcement agencies to issue citations for violating these provisions. Governor Brown vetoed the bill due to the nascency of the enforcement process, and he indicated that the authority for enforcing the delivery regulations resided with the Bureau of Cannabis Control.

  • AB-2980: Cannabis: premises: common space: The bill allows multiple cannabis licensees to share common spaces in a building such as bathrooms, lunchrooms or hallways. Governor Brown vetoed the bill so that the regulators licensing these entities could address the issue in the regulations rather than in a statute.

  • AB-3069: Cannabis: informational, educational, or training events: The bill permitted cannabis licensees to hold informational and training sessions with state and local employees, among others, without a temporary cannabis event license. Governor Brown vetoed the bill as nothing within the current legal framework would prohibit such an event.

  • AB-2058: Vehicles: driving under the influence: cannabis: The bill required the Department of Motor Vehicles to capture instances in which an individual was driving under the influence of cannabis so that the data could be used for monitoring impact of legal cannabis. Governor Brown vetoed the bill due to the technology burden on the Department of Motor Vehicles and the demand of other priorities.

  • AB-1996: The California Cannabis Research Program: The bill allowed the program to cultivate cannabis for research purposes, expanded the scope of the research and authorized controlled clinical trials to focus on examining testing methods. Governor Brown vetoed the bill citing that it conflicted directly with the Control, Regulate and Tax Adult Use of Marijuana Act.

California Governor Vetoes Commercial Cannabis Tax Bill

Governor Jerry Brown vetoed an Assembly Bill that provided the cannabis industry with equal treatment under the tax laws by allowing individuals to deduct expenses related to a cannabis business. Governor Brown vetoed the bill due to the cost to California, and stated that the proposal should be a part of the overall budget process. The Governor’s action perpetuates that arbitrary withholding of common benefits available to other California businesses, which may hamper the industry’s growth in the long run.

CALIFORNIA'S LEGISLATURE PRESENT 21 IMPORTANT CANNABIS BILLS TO GOV BROWN

In a flurry of activity, the California Legislature passed twenty-one cannabis bills in the last weeks prior to the end of the regular session on August 31st. The Legislature has presented Governor Jerry Brown with fifteen (15) bills for him to either sign or veto.  An additional six (6) bills will be presented to the governor following the engrossment process.

The scope of the bills passed by the California Legislature in the last couple of weeks of August has been monumental.  The bills address important and meaningful issues raised by constituents.  The highlights include the state driven expungement of marijuana convictions; compassionate care programs that permit the donation of cannabis products to individuals in need; the ban of cannabis in alcoholic beverages; the protection of personal data from the federal government; the expansion in industrial hemp cultivation; restricted provisioning of marijuana to animals;  equitable expansion of the cannabis industry; and the administration of cannabis on to children on schoolsites.

The following fifteen (15) bills were presented to the governor for his signature.  The links below provide the THCReg.com summary article and the final bill text.


The following six (6) bills are being enrolled and will be presented to the governor shortly. The links below provide the THCReg.com summary article and the final bill text.