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Cannabis Tax Reform: Los Angeles Voters Will Vote on Measure C

Cannabis Tax Reform: Los Angeles Voters Will Vote on Measure C

Endorsement: Yes on L.A. County Measure C for regulated cannabis sales

Author: Mark Kleiman | May 31, 2019

In the wake of yet another federal decision, on Tuesday, May 30, 2019, Los Angeles voters will vote on Measure C, which would amend the county tax code to allow for the establishment of an adult-use cannabis sales program.

Voters rejected Measure S in February, which proposed the regulation and taxation of adult-use cannabis sales. Despite the setback, cannabis advocates remain confident that a voter-approved sales program could lead to the revitalization of local cannabis sales.

While the ballot measure would establish a sales program that would take effect in July, the ballot language would also set the framework for regulation, licensing and taxation.

For several months now, I have been writing about cannabis taxes, tax policy, cannabis tax language and cannabis taxation. The topic is increasingly important as the legalization of adult-use cannabis in California has moved closer and closer to reality.

On Tuesday, it is likely that voters in the nation’s most populous state will be asked to make history. We have a chance to make history by changing cannabis laws for the better. For many cannabis activists, there is just one issue that they care about less than everything else: cannabis taxes.

For those who have been paying attention to cannabis taxes in this country, it should be apparent by now that the cannabis industry has been plagued with an uphill battle to collect taxes on an industry that is barely legal at the federal level and where there is little to no economic incentive to produce products that would be taxed in the U.S.

In fact, according to the US Department of Treasury, cannabis companies are losing an average of $60 million a year to the federal government for taxes.

The only time that this fact is likely to receive much attention, if at all, is when the IRS comes to raid dispensaries, seize their tax records and force them to close up shop. In that context, I will be the first to support cannabis tax reform. But while the federal government is trying to make up for lost revenue by cracking down on small dispensary operators, we have an obligation to our state’s residents and voters to protect cannabis businesses

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