Here in California, our legislature closed out the week with some improvements to reforms in marijuana taxes and expanding the industry’s access to banking. Once they make it to the governor’s desk, they are now set to shape the marijuana industry further into the future.
Industry advocates have been looking to 2020 as a transformative year with regard to marijuana legislation but then COVID-19 happened. But the silver lining there was that local regulators decided that the industry was essential which allowed dispensaries to stay open even amid shutdowns in some areas.
Senate Bill 67
Other news was Senate Bill 67 which will allow growers and producers to designate the region where the marijuana is grown, much like our wine industry. This is significant to ensure against false and misleading labeling and advertising.
Under this bill, marijuana must be grown in the geographically designated area that it is using in its advertising. Growers feel this will help them preserve the integrity of their product, especially those who grow craft products relying on the soil and topography of a particular area.
Possible Tax Relief
Since marijuana was first legalized, California taxes concerning the industry have been some of the highest in the nation. While reforms to Assembly Bill 1872 aren’t as aggressive as was hoped for, they are still moving in the right direction. This bill serves to freeze any potential tax rate increases on marijuana businesses since they weren’t able to get the small business relief of other industries during COVID.
Another issue regarding the cannabis industry is its inability to use banking and traditional financial services because of banks’ federal regulations. This has led some banks to avoid transactions with the industry. While Assembly Bill 1525 won’t do anything to remove federal regulations, it does remove any state penalties against institutions working with marijuana businesses and clients.
Meanwhile, federal talks about banking and marijuana have continued with a vote on federal descheduling expected later in the month. This could allow access to banking for the entire industry, if passed. Although passed in the House already last year, the Senate has remained firm.
Also on the governor’s desk are some measures for product testing changes that would allow growers to submit their unpackaged product for lab testing, making this more affordable to producers. Another measure would require more precise measurement of THC content in edibles while another would allow cannabis testing labs to offer services to law enforcement or prosecutors.
CBD RegulationsWhat didn’t make the legislative cut was an effort to regulate hemp-derived CBD in products such as food and supplements.
Despite some losses, these measures are indicative of an industry on the verge of normalization. Finally. According to Amy Jenkins, a senior policy director at the California Cannabis Industry Association and active lobbyist, “I think that’s a great testament to everything the industry has been doing to educate the legislature… It’s a testament to how far we’ve come.”
We will keep you posted.