Cannabis: excise tax: cultivation tax.

The Control, Regulate and Tax Adult Use of Marijuana Act (AUMA) , an initiative measure approved as Proposition 64 at the November 8, 2016, statewide general election, authorizes a person who obtains a state license under AUMA to engage in commercial adult-use cannabis activity pursuant to that license and applicable local ordinances. AUMA imposes an excise tax on upon purchasers of cannabis or cannabis products sold in this state at the rate of 15% of the average market price of any retail sale by a cannabis retailer, and a separate cultivation tax on harvested cannabis that enters the commercial market, as specified. Existing law requires the California Department of Tax and Fee Administration to administer and collect the taxes. Existing law requires revenues from those taxes to be deposited into the California Cannabis Tax Fund, and continuously appropriates that tax fund for specified purposes. This bill would discontinue, beginning on July 1, 2022, the imposition of the cultivation tax, as specified. The bill, if the Legislature appropriates moneys to the California Cannabis Tax Fund equivalent to the amount of revenue that would have been collected from July 1, 2022, to July 1, 2025, pursuant to the weight-based cultivation tax, as determined by the Department of Finance, would increase, from July 1, 2025, until July 1, 2026, the excise tax by an additional percentage that the Department of Finance determines will generate12 of the amount of revenue that would have been collected pursuant to the cultivation tax, and would, beginning July 1, 2026, increase the excise tax by an additional percentage determined by the department to generate the full amount of revenue that would have been collected pursuant to the cultivation tax. If the Legislature does not appropriate the moneys described above, the bill would, beginning July 1, 2022, increase the excise tax by an additional percentage determined by the department to generate the full amount of revenue that would have been collected pursuant to the cultivation tax. AUMA authorizes legislative amendment of its provisions with a 23 vote of both houses, without submission to the voters, to further its purposes and intent. This bill would declare that its provisions further the purposes and intent of AUMA. This bill would take effect immediately as a tax levy.