On Monday, California Governor Gavin Newsom signed into law a repeal of a substantial tax increase on marijuana sales in the state. By raising the cost of marijuana on the legal market, the tax increase was leading people to opt instead for making purchases on the black market.
Months back, it had looked like the tax increase may be prevented altogether. On June 4, I wrote about how the California Assembly had voted unanimously to approve AB 564, a bill that would delay for five years the tax increase that was set to take effect on July 1. Then, on July 3, I provided an update that, despite the Assembly’s vote, the tax increase took effect at the beginning of July because of the state Senate’s failure to also take action to prevent it.
On September 10, the California Senate approved AB 564 by a vote of 39-1, and, a week and a half later, the governor signed the bill into law.
Given the very lopsided votes against the tax increase in both houses of the California legislature, the tax increase appears to have been quite unpopular among state legislators. Nonetheless, the tax increase was imposed for around two and a half months.
The saying goes that nothing is certain but death and taxes. This seems doubly so in high-tax California. But, even there, the removal this week of the marijuana tax increase shows that there is hope for curtailing taxation.
