WEED FEED / John Ross Ferrara / Monday, Jan. 29, 2018 @ 9:28 a.m.
Weed Feed: Governor Brown Estimates Excise Taxes on Cannabis Will Add $643 Million to State Coffers
The Adult Use of Marijuana Act is expected to bring $643 million in excise tax revenue to the state of California in its first year.
The estimates are included in Governor Jerry Brown’s $132 billion budget proposal, which was released earlier this month.

Gov. Jerry Brown | ca.gov
While the amount is much lower than the $1 billion in revenue anticipated by some analysts, California still finds itself with a hefty $6.1 billion surplus for the next fiscal year.
The New York Times reports that Brown will use most of the surplus to bolster California’s “rainy day” fund, used to prevent layoffs and ease budget cuts during economic downswings.
The Adult Use of Marijuana Act, which went into effect on January 1, levies excise taxes on the cultivation and retail sale of recreational and medical cannabis.
The budget proposal states that under Prop. 64, cannabis is being taxed in the following ways:
The cultivation tax is $9.25 per ounce of flower, $2.75 per ounce of leaves, and $1.29 per ounce of fresh cannabis plant to be paid on all recreational and medicinal cultivation of cannabis. In addition, there will be a 15-percent tax on the retail price of cannabis.

The 2018-2019 Governor’s Budget. ca.gov
Some marijuana industry advocates like Hezekiah Allen, head of the California Growers Association, say the taxes are too steep.
“Proposition 64 set the tax rate too high, and everyone I talk to knows it,” Allen told the Los Angeles Times. “We definitely think the state Legislature should put a cannabis tax reform measure on the ballot in 2018.”
Governor Brown meanwhile, said he will defer all cannabis-related budget proposals until the May Revision.

California State Capitol Building in Sacramento | Wikimedia.
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The Weed Feed is a weekly column written by John Ross Ferrara.
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