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California pot companies warn of impending industry collapse

LOS ANGELES (AP) — Top California cannabis companies warned Governor Gavin Newsom on Friday that the state’s legal industry is on the brink of collapse and needs immediate tax cuts. and rapidly expanding retail stores to stabilize the wobbly market.

The letter is signed by more than two dozen executives, industry officials and legalization advocates after years of complaints that the highly taxed and regulated industry has been unable to compete with the economy. widespread illegality, where consumer prices are much lower and sales double or triple the law. business.

Four years after widespread legalization began, “our industry is collapsing,” the letter also sent to legislative leaders in Sacramento said.

Industry leaders have demanded the immediate lifting of the grower’s crop tax, a three-year break from the excise tax and the expansion of retail stores across the state. It is estimated that about two-thirds of California cities still do not have dispensaries, as local governments allow sales and manufacturing.

They write that the current system “has been set up to all but fail”.

“The opportunity to create a strong legal market has been squandered as a result of excessive taxation,” the letter read. “75% of cannabis in California is marketed illegally and is untested and unsafe.”

They told the governor: “We need you to understand that we have been pushed to a breaking point.

Newsom spokesman Erin Mellon said in a statement that the governor supports marijuana tax reform and sees the system in need of change, while expanding enforcement against illicit sales and production. France.

“It is clear that the current tax regime presents unforeseen but serious challenges. Any tax reform effort in this area will require action from two-thirds of the Legislature and the Governor is ready to work with them to find a solution,” Mellon said.

The companies, executives and groups that signed the letter include the California Cannabis Industry Association, the California branch of the National Organization for Cannabis Law Reform, the United Cannabis Business Association, which is based in California. Los Angeles, Flow Kana Inc., Harborside Inc. and CannaCraft.

In a meeting with reporters, Strong Agronomy’s Darren Story said tough market conditions forced him to cut more than half of his staff. He said taxes will increase next year making it an easy option for shoppers. At half the price of what they see on legitimate store shelves, he says “most consumers will shell out.”

The companies have asked Newsom to include their proposals in his upcoming budget proposal, to be published early next year.

“The solution to these problems and the ability to save the industry is in your hands,” they wrote.

https://kfor.com/news/california-pot-companies-warn-of-impending-industry-collapse/ California pot companies warn of impending industry collapse

JACLYN DIAZ

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