The Gov’ blames local governments for sharp fall in cannabis revenues

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Gov. Newsom’ advises that California expects $223 million less in cannabis tax revenue through June 2020. Newsom is blaming local governments. 


The underperformance of California’s legal marijuana market has ripped a hole in the state budget, according to documents released Thursday. Gov. Gavin Newsom’s administration now says it expects $223 million less in cannabis tax revenue through June 2020 compared to projections from just four months ago.

Newsom is blaming local governments that have been resistant to commercial pot in their communities.

“We knew [some counties and cities] would be stubborn in providing access and providing retail locations and that would take even longer than some other states, and that’s exactly what’s happening,” the governor said.

But consumers also know they can avoid cannabis taxes by continuing to rely on black market sources. The state too has been sluggish in the licensing process.

Not long ago, California was projecting $1 billion in revenue from the legal market. State excise taxes are expected to produce $288 million this year and $359 million next year, which is $67 million and $156 million less than expected.

Local prohibitions on marijuana and declining revenue are among the main impetuses behind new state rules allowing cannabis deliveries even in jurisdictions in which they aren’t welcome.

That policy has sparked a legal challenge from cities and counties against the state.




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One Response to The Gov’ blames local governments for sharp fall in cannabis revenues

  1. Avatar
    Marc May 23, 2019 at 10:05 am

    What did he expect? You can’t expect revenue with so many cities and counties that have their prohibitionist attitude about cannabis still intact.
    The tax rates for the legal cannabis industry is also preposterous and needs to be reduced, as well as fees to obtain licensing. Fees are high enough that you have to be part of some rich person club in order to afford the ridiculous cost to become a legal cannabis business.


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