Photo: Getty Images
California cannabis companies are warning Governor Gavin Newsom that the state's legal industry is on the verge of collapse.
According to the Associated Press, California is in need of immediate tax cuts and a rapid expansion of retail outlets to stabilize the shaky marketplace.
A letter was signed by over two dozen executives, industry officials, legalization advocates, and was sent to legislative leaders in Sacramento.
The industry has complained for years that heavy taxes and stifling regulations have left them unable to compete with the illegal marijuana economy.
The current system is "rigged for all to fail," reads the letter. "The opportunity to create a robust legal market has been squandered as a result of excessive taxation. Seventy-five percent of cannabis in California is consumed in the illicit market and is untested and unsafe.”
Erin Mellon, a spokeswoman for Newsom, said that the governor supports cannabis tax reform and recognizes that the system needs to change.
“It’s clear that the current tax construct is presenting unintended but serious challenges. Any tax-reform effort in this space will require action from two-thirds of the Legislature and the Governor is open to working with them on a solution,” said Mellon.
Companies and groups that signed the letter included the California Cannabis Industry Association, the California arm of the National Organization for the Reform of Marijuana Laws, the Los Angeles-based United Cannabis Business Association, Flow Kana Inc., Harborside Inc., and CannaCraft.
They're asking Newsom to include their proposals in his upcoming budget proposal, due for early next year.