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California Governor Approves Changes To Marijuana Banking And Labeling Laws

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California Gov. Gavin Newsom (D) signed a handful of marijuana bills into law on Tuesday, making a series of small adjustments to the nation’s largest legal cannabis system. More sweeping proposals such as overhauling the state’s marijuana regulatory structure will have to wait until next year, the governor said.

Among the biggest of the new changes are revisions to banking and advertising laws. With many legal marijuana businesses are still unable to access financial services, Newsom signed a bill (AB 1525) to remove state penalties against banks that work with cannabis clients.

“This bill has the potential to increase the provisions of financial services to the legal cannabis industry,” Newsom wrote in a signing statement, “and for that reason, I support it.”

Democrats in Congress, meanwhile, have been working for months to remove obstacles to these businesses’ access to financial services at the federal level. A coronavirus relief bill released by House Democratic leaders on Monday is the latest piece of legislation to include marijuana banking protections. Past efforts to include such provisions have been scuttled by Senate Republicans.

In his signing statement on the banking bill, Newsom directed state cannabis regulators to establish rules meant to protect the privacy of marijuana businesses that seek financial services, urging that data be kept confidential and is used only “for the provision of financial services to support licensees.”

Another bill (SB 67) the governor signed on Tuesday will finally establish a cannabis appellation program, meant to indicate where marijuana is grown and how that might influence its character. The system is similar to how wine regions are regulated.

Under the new law, growers and processors under the new law will be forbidden from using the name of a city or other designated region in product marketing unless all of that product’s cannabis is grown in that region. Similar protections already apply at the county level.

For outdoor growers, the new law recognizes the importance of terrior—the unique combination of soil, sun and other environmental factors that can influence the character of a cannabis plant. For indoor growers, it provides a way to represent a hometown or cash in on regional cachet.

Most of the other new changes that the governor signed into law are relatively minor and will likely go unnoticed by consumers. One, for example, builds in more wiggle room on the amount of THC in edibles (AB 1458), while another would allow state-licensed cannabis testing labs to provide services to law enforcement (SB 1244).

The bills were approved by state lawmakers earlier this month, as the state’s legislative session drew to a close.

Other pieces of cannabis legislation passed by the legislature this session were met with the governor’s veto. On Tuesday, Newsom rejected a proposal (AB 1470) that would have allowed processors to submit unpackaged products to testing labs, which industry lobbyists said would reduce costs. Currently products must be submitted in their final form, complete with retail packaging. Newsom said the proposal “conflicts with current regulations…that prevent contaminated and unsafe products from entering the retail market.”

“While I support reducing packaging waste, allowing products to be tested not in their final form could result in consumer harm and have a disproportionate impact on small operators,” Newsom said in a veto statement.

Those changes to testing procedures should instead be considered next year, Newsom said, as part of a pending plan to streamline California’s cannabis licensing and regulatory agencies.

“I have directed my administration to consolidate the state regulatory agencies that currently enforce cannabis health and safety standards to pursue all appropriate measures to ease costs and reduce unnecessary packaging,” he wrote. “This proposal should be considered as part of that process.”

Newsom also last week vetoed a bill (AB 545) that would have begun to dissolve the state Bureau of Cannabis Control, which oversees the legal industry. In a statement, the governor called that legislation “premature” given his plans for broader reform.

“My Administration has proposed consolidating the regulatory authority currently divided between three state entities into one single department,” Newsom wrote, “which we hope to achieve next year in partnership with the Legislature.”

Earlier this month, the governor signed into law one of the industry’s top priorities for the year—a measure (AB 1872) that freezes state cannabis cultivation and excise taxes for the entirety of 2021. The law is intended to provide financial stability for cannabis businesses in California, where taxes on marijuana are among the highest in the nation.

The state’s leading marijuana trade group, the California Cannabis Industry Association (CCIA), applauded the governor’s moves. All the bills approved by Newsom this week had the industry group’s support.

“We thank Governor Newsom for prioritizing these bills, which seek to reduce regulatory burdens, improve enforcement, expand financial services and enhance the state’s cannabis appellation’s program,” CCIA Executive Director Lindsay Robinson said in a message to supporters on Wednesday. “Like so many, the cannabis industry has faced a series of unexpected challenges and setbacks in 2020. We look forward to continuing to work with the Newsom Administration, and the Legislature, as we pursue a robust policy agenda in 2021.”

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Image element courtesy of Gage Skidmore

Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.

Ben Adlin is a Seattle-based writer and editor. He has covered cannabis as a journalist since 2011, most recently as a senior news editor for Leafly.

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Colorado Earned $423 Million In Marijuana Tax Revenue Last Year

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More than $12 billion in marijuana has been sold since legalization in 2014, with the state collecting over $2 billion in taxes.

By Robert Davis, The Center Square

Colorado brought in a record $423 million in tax revenue from marijuana sales last year, according to the latest market report from the state’s Department of Revenue (DOR).

In all, Colorado has sold more than $2 billion in marijuana through November 2021, making it the second consecutive year that the state has eclipsed that mark. In 2020, the state collected $387 million in taxes from the sales.

Colorado’s tax revenue total also implies that the state beat its previous record of $2.1 billion in sales, though DOR said it will release the final numbers next month.

More than $12 billion in marijuana has been sold since legalization in 2014, with the state collecting over $2 billion in taxes.

Colorado collects its marijuana taxes from a 2.9 percent state sales tax on marijuana sold in stores, a 15percent state retail marijuana sales tax and a 15 percent retail marijuana excise tax on wholesale sales and transfers of marijuana. The state also collects fee revenue from marijuana license and application fees.

In December, Colorado collected more than $30 million in taxes, capping off a five-month streak of declining tax revenue.

The state also recorded more than $158 million in sales in November, with both medical and recreational marijuana showing significant declines in sales.

Colorado sold $131 million in recreational marijuana in November, an 11 percent drop when compared to October.

Similarly, November’s medical marijuana sales totaled $26 million, representing a drop of more than 10 percent on a month-over-month basis.

The story was first published by The Center Square.

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Arizona Hits Recreational Marijuana Sales Record, With New Program Catching Up To Medical

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Medical cannabis sales eclipsed recreational from February through October—adult-use sales began on January 22—but in November, those numbers were almost identical.

By David Abbott, Arizona Mirror

Arizona cannabis sales continued on an upward trajectory in 2021, with the Arizona Department of Revenue reporting more than $1.23 billion in combined cannabis sales through the first 11 months of the year.

In November, adult-use recreational cannabis sales hit a new peak and crossed $60 million for the first time. Medical sales have fluctuated throughout the year, topping out at about $73 million in March and April.

Medical sales eclipsed recreational from February through October—adult-use sales began on January 22—but in November, those numbers were almost identical, with the medical program bringing in an estimated $60,365,545, while recreational sales reached $60,299,191.

In October, estimated cannabis sales for both programs were within $7 million of each other, the first time recreational sales came within $10 million of medical sales. But the adult-use market is in its infancy and is expected to match the medical program’s economic heft within a few years.

Cannabis sales also provided a solid tax contribution in 2021.

TAXABLE Sales (Estimated) to date
PERIOD COVERED ADULT USE‐420 MEDICAL‐ 203 EXCISE TAX
Jan‐21 $7,370,460 $42,140,608 $11,391,371
Feb‐21 $32,697,512 $55,320,625 $39,246,992
Mar‐21 $51,628,266 $72,934,129 $55,808,898
Apr‐21 $54,037,990 $72,944,477 $58,954,469
May‐21 $52,843,171 $70,158,567 $59,372,157
Jun‐21 $50,943,017 $64,854,708 $56,749,799
Jul‐21 $54,324,542 $70,880,576 $58,740,337
Aug-21 $51,877,656 $65,492,643 $57,675,654
Sep-21 $52,450,298 $62,704,561 $57,663,164
Oct-21 $59,508,253 $65,415,461 $62,446,719
Nov-21 $60,299,191 $60,365,545 $63,187,702
Dec-21 $20,922 $591,294 $0
$528,001,278 $703,803,194 $581,237,261

The state collects 16 percent excise tax on recreational sales in addition to the standard sales tax; medical patients pay a 6 percent excise tax. Local jurisdictions charge an additional 2 percent or so for all marijuana sales.

Taxes collected in November for recreational cannabis sales were $5,055,950, with medical slightly less at $5,026,317. The excise tax reached $10,110,032 for a total of $20,192,299 in tax revenue from November marijuana sales.

Proposition 207, which voters approved in 2020 to legalize adult use of cannabis, included specific uses for taxes collected on the recreational side. One-third is dedicated to community college and provisional community college districts; 31 percent to public safety—police, fire departments, fire districts, first responders—25 percent to the Arizona Highway User Revenue Fund and 10 percent to the justice reinvestment fund, dedicated to providing public health services, counseling, job training and other social services for communities that have been adversely affected and disproportionately impacted by marijuana arrests and criminalization.

The state collected a total of $196,447,570 in tax revenue the first 11 months of 2021 from cannabis sales, with $44,533,436 from recreational, $58,916,172 from medical and $92,997,962 from the excise tax.

This story was first published by Arizona Mirror.

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Michigan Breaks Another Marijuana Sales Record For December, State Officials Say

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Michigan closed out 2021 with another record-breaking month of adult-use marijuana sales in December, state officials say.

The state saw more than $135 million in recreational cannabis purchases and about $33 million in medical marijuana sales last month.

Andrew Brisbo, executive director of the Michigan Marijuana Regulatory Agency (MRA), said on Monday that the numbers “marked another high for the adult-use industry.” The previous adult-use marijuana sales record happened in October, with about $128 million in purchases.

“It’s good to note that the new high is not because of increasing prices,” he said. “In fact, prices in medical and adult-use continue to drop, month over month, and year over year.”

While December set the new record for adult-use marijuana purchases, the state saw the most combined recreational and medical cannabis sales in July, with about $171 million sold.

The latest data brings Michigan’s total cannabis sales for 2021 to $1,311,951,737 for adult-use and $481,225,540 for medical marijuana. And those purchases are translating into hundreds of millions of dollars in tax revenue for the state.

About $131 million is going to a cannabis excise tax fund that supports various initiatives such as infrastructure and public education, MRA spokesman David Harns said. Another $115 million will support the state general fund.

In nearby Illinois, December was also another record-breaking month, with $137.9 million in adult-use marijuana sales.

Last year, Illinois took in almost $100 million more in tax revenue from recreational cannabis sales than from alcohol, state data shows. And cannabis tax dollars have exceeded those for liquor every month since February.

Part of that marijuana tax revenue is actively funding equity initiatives in the state. For example, Illinois officials announced last month that applications are opening for $45 million in new grants—funded by cannabis tax dollars—that will support programs meant to reinvest in communities most harmed by the drug war.

States that have legalized cannabis have collectively garnered more than $10 billion in tax revenue since the first legal sales started in 2014, according to a report released by the Marijuana Policy Project (MPP) last week.

In Arizona, medical and adult-use marijuana sales topped $1 billion in the first ten months of the year, state tax officials said.

California collected about $817 million in adult-use marijuana tax revenue during the 2020-2021 fiscal year, state officials estimated in August. That’s 55 percent more cannabis earnings for state coffers than was generated in the prior fiscal year.

A recent scientific analysis of sales data in Alaska, Colorado, Oregon and Washington State found that marijuana purchases “have increased more during the COVID-19 pandemic than in the previous two years.”

In July alone, at least three states saw record-breaking sales for recreational cannabis. The same goes for Missouri’s medical marijuana program.

GOP Texas Governor Says People Shouldn’t Be Jailed Over Marijuana Possession, But Misstates Current Law

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