Senator McGuire to chair Oversight Hearing on cannabis taxes and regulatory timelines

Tuesday, February 7, 2017

Sacramento, CA – Senator Mike McGuire, who has been voicing concern over the last several months about the tight timelines associated with Proposition 64, will chair a Senate Governance and Finance Committee hearing next week focused on cannabis business taxes, implementing California’s Cannabis tax collection system and the “track and trace” system which verifies cannabis taxes and product safety – all critical elements of the structure for cannabis that is being developed, and that is slated to go live on January 1, 2018.  

Concerns about whether or not these systems will be up and running by this deadline will be addressed and leaders from the Board of Equalization, California Department of Food and Agriculture, local elected leaders, industry professionals and public safety officials will talk about some of the difficulties in regulating an industry that has been operating essentially unregulated for 20 years.

“The California Cannabis industry is worth an estimated $7 billion, and we’re only bringing in a small fraction of taxes the state is due, about 20-30%. The state’s tax collection system is not in place and it will be near impossible to get it up and running by the new year,” Senator McGuire said. “We are building the plane while it’s being flown and we need to start developing a backup plan sooner rather than later.”

The Senate Oversight Hearing: “California Cannabis in a Turbulent Time” will be held on Tuesday, February 14 at 1:30 pm in Room 2040 of the State Capitol.

There are significant unanswered questions as the state moves into a new era of cannabis under Proposition 64 and those questions will be asked and answered at next week’s hearing. Topics include current and future tax compliance rates; obstacles and hurdles retailers will face as they come into the system; how the Board of Equalization will handle the influx of hundreds of millions of dollars in cash; how long it will take the state to get the tax collection and track and trace systems up and running; how the state intends to sign up the hundreds of thousands of growers and cannabis related businesses to start paying their mandated tax and setting some realistic timelines for the track and trace system to be up and running.

“Proposition 64 put a massive requirement on state marijuana regulators and very little time to accomplish the landslide of rules and regulations mandated by the initiative. Some departments who have been working on the licensure issue for the last year may well be ready by January 1, 2018. But we have to face the facts – it’s not realistic that all of the Prop 64 rules and regulations will be in place by the New Year,” Senator Mike McGuire said. “The all-important Track and Trace program, which verifies taxes and ensures product safety, will not be in place by January 1 and we have to resolve the massive and uneven tax collection process that currently exists throughout the state. I think it’s important that we are transparent and realistic, and that is why we are holding this hearing to ensure an implementation timeline is put into place over the next several months.”

Senator Mike McGuire, who represents California’s North Coast, is Chair of the Senate Governance and Finance Committee. The hearing will be livestreamed and can be viewed at