California Gov. Gavin Newsom’s budget plan is out and it earmarks roughly $100 million toward combating the unregulated cannabis market.
The state is facing a $22.5 billion shortfall, and yet, Newsom said Tuesday during a news conference, “we’re keeping our promises.”
Newsom’s office released details of his budget plan on Tuesday, and roughly $100 million in cannabis tax revenue will be distributed across five agencies to “reinforce enforcement efforts.”
The plan, for example, allocates nearly $2 million toward the creation of a permanent Department of Cannabis Control Enforcement District Office in Fresno to “further the enforcement activities of the department in the Central Valley.”
It also includes nearly $84 million for the Board of State and Community Corrections. This funding is bound for local governments to help pay for law enforcement efforts, fire-related protection, and other public health and safety efforts linked to cannabis.
The scope of the funding illustrates the multi-pronged approach required in cannabis enforcement. More than $10 million, for example, will “address water quality and instream flow-related impacts from cannabis cultivation through enforcement against illegal cultivations and compelling enrollment of eligible cultivators in the Water Board’s regulatory program.”
Still, the budget emphasizes that the state has “made significant progress in strengthening” the legal market.
One of the most significant steps took place last year, when, following a major push from industry and lawmakers, as Cannabis Wire reported, Newsom struck the cultivation tax. The state’s growers argued that the tax was not only unfairly structured, as it did not drop in tandem with prices, but that it gave the unlicensed and unregulated operators, who did not pay any taxes, an unfair advantage.
As a result of this move, the budget proposes pulling $95.4 million from the general fund to “backfill the estimated decline in revenues.”