California cannabis laws have transformed over time, beginning in 1996 with Prop 215 (The first legislation in the U.S. that allowed for the legal medicinal use of marijuana). This evolving status has kept the legal community, the cannabis industry, and the general populous on high alert. 

Building on the momentum of Prop 215, California voters passed Prop 64 (Adult Use of Marijuana Act) with 57% of the vote, in 2016. That opened up the recreational use demographic and the race for market share. Initially Prop 64 legalized the possession, cultivation, and personal use of marijuana. Then on January 1, 2018, the law allowed for the sale and taxation of recreational marijuana.

California Cannabis Laws Change for 2020

The primary change so far in 2020 has been the increase to the cannabis tax perpetuated by the California Department of Tax and Fee Administration (CDTFA). This includes cannabis cultivation tax and excise mark-up rate calculation increases. The cultivation tax is going from 4.3%-4.6% and the excise mark-up rate increasing from 60%-80%. Consumers will feel the tax increase at the register where cannabis purchases will be costing a little more in 2020.

Cannabis Taxes Fund Research

cannabis money 

It’s not likely that the tax increase will slow the California legal cannabis market that reportedly reached 3.1 billion in 2019. That means a steady flow of tax dollars earmarked for drug treatment, research, and enforcement.

Major Universities have secured millions in funding to study medical marijuana and evaluate the implementation and impact of Proposition 64. Additional funding is going directly to the Department of the California Highway Patrol to research technology that would determine whether a driver is impaired by cannabis.

Whatever is left after research and enforcement take their share, will be split between youth programs, environmental mitigation of the illegal cannabis trade, and health and safety campaigns. 

Growing Pains

There are going to be some growing pains as California lawmakers learn how to effectively manage the legal cannabis industry. As consumers, it may seem like a punch in the gut every time they decide to increase the cannabis tax and cannabis business owners fair no better. However, the regulated market is the best way to enforce product standards of safety and reliability. It’s also the best way to generate a revenue stream to further much-needed cannabis research. With that in mind, enduring tweaks to the law along the way is a means to a positive end.

MarijuanaBreak Staff (2020, January) Proposition 215: One of Cannabis’ Most Historical Events Retrieved from https://www.marijuanabreak.com/proposition-215-the-informative-guide-to-one-of-cannabis-most-historical-events

Ballotpedia.org California Proposition 64, Marijuana Legalization (2016) Retrieved from https://ballotpedia.org/California_Proposition_64,_Marijuana_Legalization_(2016)

California Department of Tax and Fee Administration Cannabis Rate Changes Effective January 1, 2020, Retrieved from https://www.cdtfa.ca.gov/formspubs/L720.pdf

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