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Hochul’s budget includes potency tax repeal and enforcement efforts.
Gov. Kathy Hochul has announced her FY 2025 budget and it includes two cannabis items: a pitch to “repeal and replace” the potency tax and enforcement legislation. Both were repeated topics at the inaugural Senate Subcommittee on Cannabis hearing in October, so it’s no surprise that the governor would tackle these two issues.
“To promote and support the expansion of the legal adult-use cannabis market, the Executive Budget
simplifies, streamlines, and reduces the tax collection obligations and burden for cultivators, processors and distributors by repealing the wholesale THC potency tax and replacing it with a wholesale excise tax” of 9% and keeping the retail and local retail taxes as is, the Briefing Book notes.
“For vertically-integrated entities such as the Registered Organizations and microbusinesses where an arm’s length transaction between the distributor and the retailer is nonexistent, the new wholesale excise tax will accrue on the final retail sale to consumers and be imposed on 75 percent of the final retail sales price.”
On enforcement, this was the only area of cannabis policy that Hochul highlighted during her State of the State speech, so we knew that this was one item that she planned to push, specifically concerning localities.
The Executive Budget includes legislation to “strengthen the Cannabis Law to better enable the Office of Cannabis Management (OCM), as well as local government agencies, to seal or padlock an unlicensed cannabis business,” the Briefing Book notes. The Briefing Book also notes that additional funding will be allocated to the Department of Taxation and Finance to “assist these expanded enforcement efforts,” but specific details are not yet known.
NYC Mayor Eric Adams seems pleased with Hochul’s approach to enforcement, which marks a change in tune for the mayor.
“Governor Hochul has continued to prioritize keeping New Yorkers safe, and by investing in our criminal justice system, we will break the logjams and simultaneously deliver both safety and justice to New Yorkers,” Adams said after Hochul’s State of the State address.
“With the additional authority that the governor has proposed, we’ll also have new tools to tackle the illegal smoke shops that have popped up on too many corners in our city, giving us the opportunity to get cannabis right in the five boroughs.”
Indiana: Another poll shows support for adult use.
As Indiana’s legislative session gets going, and bills to legalize cannabis for medical and adult use enter the mix yet again, a new poll shows that residents support reform.
The Bowen Center for Public Affairs at Ball State University released results from its 2023 Hoosier Survey, which looks at issues like abortion, taxes, and, of course, cannabis.
The survey asked “Which comes closer to your view about the use of marijuana by adults,” to which 54.2% picked “It should be legal for personal use,” 32.2% picked “It should be legal for medicinal use,” and 9.8% picked “It should not be legal.”
For 2022, the responses came in at 56%, 29%, and 15%, respectively.
“The findings are similar to last year’s findings in that Americans and Hoosiers have shifted dramatically on their attitudes toward marijuana,” said Chad Kinsella, director of the Bowen Center, in the announcement. “Many states have recently legalized marijuana, including neighboring states like Ohio in 2023.”
How did California’s Unified Cannabis Enforcement Taskforce do in Year One?
The Taskforce announced that it “seized more than $312 million in unlicensed cannabis” last year.
More specifically, this equals “190,000 pounds of illegal cannabis, the eradication of almost 318,000 plants and the seizure of 119 illegally possessed firearms.”
Gov. Gavin Newsom formed the Taskforce in 2022, and it is overseen by the Department of Cannabis Control (DCC), the California Department of Fish and Wildlife (CDFW), and the Homeland Security Division of the Governor’s Office of Emergency Services (Cal OES).
