LADIES AND
GENTLEMAN THE. SUB COMMITTEE IS
GOING TO CONVENE. YOUR
SUBCOMMITTEE FOR OF THE BUDGET.
AND PURPOSE TODAY IS THE
DEPARTMENT OF CANNABIS CONTROL.
WE HAVE THE NECESSARY PRACTICING
COMMENTS I HAVE TO MAKE. BECAUSE
OF THE CALL WITH EMERGENCY AND
TO ENSURE THE PROTECTION OF THE
PUBLIC EMPLOYEES. NUMBERS HERE
WE HAVE TO LIMIT NONESSENTIAL
GATHERINGS AND HERE'S SOCIAL
DISTANCING. AND FACE COVERING
GUIDELINE. YOU CAN FLY TO THOSE
ORDERS MADE IT AS NECESSARY THE
NORMAL PRACTICES IN ORDER TO
ENSURE THAT THE PUBLIC CONTINUES
TO HAVE ACCESS TO THE
LEGISLATIVE PROCESS. WE'RE
HOLDING OUR HEARING IN HERE IN
THE CAPITAL WITH SOME NEIGHBORS
ABLE TO PARTICIPATE REMOTELY I
DON'T THINK ANY ARE
PARTICIPATING REMOTELY TODAY IS
MY CORRECT. NOBODY NO MEMBERS
OKAY. THOSE WHO WILL PROVIDE
TESTIMONY. BEFORE THE COMMITTEE-
ARE ALSO PARTICIPATING REMOTELY
. FOR THE REMOTE PARTICIPANTS
MUTE YOUR PHONES OR COMPUTERS
THIS WILL HELP ELIMINATE
DISTRACTING FEEDBACK. I ASK
EVERY TIME YOU WISH TO BE
RECOGNIZED YOU USE YOUR RAISE
YOUR HAND FEATURE ON THE PROGRAM
. EVERY TIME YOU ARE RECOGNIZED
TO SPEAK POP UP WINDOW WILL
APPEAR. ASKING IF YOU WOULD LIKE
TO ON MUTE. POLICE SELECTOR ON
MUTE BEFORE YOU BEGIN SPEAKING.
R. O. I. T. PERSONNEL COULD PUT
YOU BACK ON MUTE WHEN YOU'RE
DONE. ONCE RECOGNIZED TO SPEAK
MAKE SURE YOU CAN BE SEEN ON THE
SCREEN. AND STATE YOUR NAME. AND
WHEN YOU'RE READY HER DRESS THE
COMMITTEE. TO ALLOW PUBLIC
ACCESS WE'VE ADMITTED MEMBERS OF
THE PUBLIC IN THE HEARING ROOM.
TO THE EXTENT THE SOCIAL
DISTANCING. REQUIREMENTS WILL
PERMIT. AND WILL BE USING
TELECONFERENCING SERVICE FOR
THOSE INDIVIDUALS WHO WISH TO
TESTIFY TO THE COMMITTEE TODAY.
OUR PARTICIPANT NUMBER IS.
877-226-8163. EIGHT SEVEN SEVEN
TWO TWO SIX EIGHT ONE SIX THREE
AND THE ACCESS CODE IS. SEVEN
SIX TWO TWO FOURSIX TWO. SEVEN
SIX TWO TWO FOUR SIX TWO. FOR
DETAILED INSTRUCTIONS ON HOW THE
TELECONFERENCES TO WORK PLEASE
REFER TO THE SENATE. INDOOR
COMMITTEE WEBSITE. WHEN WE MOVED
TO PUBLIC COMMENT YOU'LL BE
PROMPTED BY MODERATORS DIAL ONE
THEN ZERO. PRESS THERE'S ONLY
ONE TIME ONE THEN ZERO WAIT
PATIENTLY FOR THE OPERATOR TO
ASSIGN YOU A LINE NUMBER. AND
THEN THERE WILL BE A SHORT WAY.
ONCE YOU RECEIVE YOUR LINE
NUMBER YOU'LL WAIT IN QUEUE. FOR
THE MODERATOR TO CALL YOUR LINE
NUMBER AT THAT TIME YOU'LL BE ON
MUTED AND YOU'LL BE READY TO
ADDRESS THE COMMITTEE. I'LL
MAINTAIN DECORUM DURING THE
HEARING AS IS CUSTOMARY. ANY
INDIVIDUAL WHO IS DISRUPTED MAY
BE REMOVED FROM THE REMOTE
MEETING SERVICE OR HAVE
CONNECTIONS NEEDED. PUBLIC
COMMENT WILL BE HEARD AFTER ALL
DISCUSSION ITEMS HAVE BEEN
PRESENTED. LASTLY FOR EVERYONE
PHYSICALLY PRESENT HERE TODAY
PLEASE KEEP YOUR MASKS ON
COVERING YOUR NOSE AND MOUTH. AT
ALL TIMES. AND MAINTAIN SOCIAL
JUSTICE. THE DAY WILL HAVE A
ROBUST PANEL DISCUSSION ON
CANNABIS TAX REFORM WITH THE
GOVERNOR HAS INDICATED THAT HE
SUPPORTS AND PLANS TO WORK WITH
THE LEGISLATURE TO STABILIZE THE
MARKET. BETTER SUPPORT
CALIFORNIA SMALL LICENSE
OPERATORS INSTRUCTING COMPLIANCE
WITH STATE LAW WE'LL HEAR FROM
DIVERSE PERSPECTIVES. WILL ASK
FOR PATIENCE AND WE'RE HERE FROM
ALL OF THE PANELISTS BEFORE THE
COMMITTEE BEGINS DISCUSSION.
FIRST ALLEGE ANALYST'S OFFICE
WILL PROVIDE AN OVERVIEW OF THE
CANNABIS TAXES. LET JOURNALISTS
ARE YOU PREPARED TO PROCEED. YES
THANK YOU OKAY WE HAVE MISTER
GREG MINOR NO I'M SORRY. YES
SORRY SAID CHRISTINE WITH THE
WOULD YOU LIKE ME TO PERCY IF
YOU WOULD BE SO KIND THANK YOU.
THANK YOU I'M SORRY CHRISTINE
WITH THE LEGISLATIVE ANALYST'S
OFFICE TO ACCOMPANY MY
TESTIMONIES TODAY WE'VE
DISTRIBUTED A BRIEF HAND THAT
WHICH I WILL ATTEMPT TO START A
SCREEN SCHERING NOW. OKAY SO I
HOPE YOU CAN ALL SEE THAT THIS
WILL BE WELL WE'LL GET TO
SHORTLY IS GONNA BE THE FIRST
FIGURE. OUT WHAT IS YOUR LAST
NAME STAFF- KIRSTINE K. E. R. S.
T. E. I. N. VERNALIS. THANK YOU
SIR ARE MOST UPON WAS JUST
JOINED US. THANK YOU MOST
ASPECTS OF CALIFORNIA'S CANNABIS
TAXES COME FROM TO LOS.
PROPOSITION SIXTY FOUR OF TWENTY
SIXTEEN AND S. B. NINETY FOUR OF
TWENTY SEVENTEEN A PROPOSITION
SIXTY FOUR ESTABLISHED WHOSE
STATEWIDE CANNABIS TAXES A
RETAIL EXCISE TAX AND A
CULTIVATION TAX US TO THE RETAIL
EXCISE TAX RAISES ABOUT 80% OF
THE REVENUE AND THE CULTIVATION
TAX RAISES THE REMAINING 20% SO.
AS YOU CAN SEE IN THE FIGURE
HERE THAT I'M SHARING OF THE
ZOOM IN ON IT A LITTLE BIT.
AREN'T REVENUES FROM THESE TAXES
INITIALLY- WERE PRETTY WEAK THE
FIRST QUARTER TWO BUT THEN THEY
GREW QUITE RAPIDLY AFTER THAT
ARE FROM FISCAL YEAR TWENTY
EIGHTEEN NINETEEN TO FISCAL YEAR
TWENTY TWENTY TWENTY ONE REVENUE
GREW BY ABOUT SIXTY THAT 6% PER
YEAR- BUT REVENUE GROWTH OVER
THE LAST FEW QUARTERS INCLUDING
AN UPDATE RELEASED BY THE
ADMINISTRATION VERY RECENTLY
AFTER WE PUT TOGETHER THIS GRAPH
HAS. BEEN A MUCH SLOWER. I AM SO
ALL SURE THAT. NUMBER AT. SCREEN
THERE TOLD NEXT- SO- WILL COVER
JUST A FEW THE BASIC FEATURES OF
THOSE TWO STATEWIDE EXCISE TAXES
STATEWIDE CANNABIS TAXES THAT I
MENTIONED AS WELL AS LOCAL TAXES
SO FIRST THE RETAIL EXCISE TAX
OUR PROP SIXTY FOUR SET THE
STATE'S EXCISE TAX RATE AT
FIFTEEN PERCENT. OF THE RETAIL
PRICE SB NINETY FOUR MOVED THE
REMITTANCE RESPONSIBILITY FOR
THIS TAX FOR RETAILERS TO
DISTRIBUTORS. BUT WHEN RETAILERS
BUYING CANNABIS PRODUCTS FROM
DISTRIBUTORS NOBODY KNOWS FOR
SURE AT THAT TIME WHAT THE
ULTIMATE RETAIL PRICE WILL BE SO
TO MAKE IT POSSIBLE FOR
DISTRIBUTORS TO REMIT THE TAX SB
NINETY FOUR EFFECTIVELY TURNS
THIS SO CALLED RETAIL TAX INTO
WHOLESALE TAX FOR MOST
TRANSACTIONS. THIS DIRECTS THE
DEPARTMENT OF TAX AND FEE
ADMINISTRATION TO ESTIMATE THE
STATEWIDE AVERAGE RETAIL MARKUP
AND THEY USE THAT NUMBER TO
ESTIMATE THE WHOLESALE TAX RATE
THAT'S EQUIVALENT ON AVERAGE
CHIU US 15% RETAIL. RIGHT NOW
THAT TAX RATE IS 27% OF THE
WHOLESALE PRICE. THE OTHER STATE
WIDE CAMPUS TAX AS I MENTIONED
EARLIER IS THE CULTIVATION TAX.
THIS TAX IS A FIXED DOLLAR
AMOUNT PER AN OUNCE- WITH
DIFFERENT RATES FOR THREE
DIFFERENT CATEGORIES OF
HARVESTED CANNABIS. PROP SIXTY
FOUR ESTABLISHED AN ANNUAL
INFLATION ADJUSTMENTS FOR THESE
TAX RATES. ARE WHICH KEEPS THE
REAL TAX RATE CONSTANT OVER THE
LONG TERM. SB NINETY FOUR- MADE
DISTRIBUTORS RESPONSIBLE FOR
REMITTING THIS TAX TO THE STATE
JUST AS IT DID FOR THE RETAIL
ACCESS TO. IN THE THIRD MAJOR
PIECE OF THE PUZZLE IN ADDITION
TO THOSE- TO STATEWIDE CANNABIS
TAXES I IS THE CANNABIS TAXES
THAT LOCAL GOVERNMENTS IMPOSE ON
BUSINESSES ALL UP AND DOWN THE
CAMPUS SUPPLY CHAIN. IN TWENTY
NINETEEN WE ESTIMATED THAT THE
TOTAL STATEWIDE AVERAGE LOCAL
CANNABIS TAX RATE WAS ROUGHLY
EQUIVALENT. TO A 14% TAX ON
RETAIL SALES. SO NOW I WILL
SHARE A FIGURE I'LL TRY TO
SCREEN SURE AGAIN THAT
ILLUSTRATES THE FLOW OF TAX
PAYMENTS FORTY RETAIL EXCISE TAX
AND FOR THE CULTIVATION. OKAY
WE'LL GO- OVER TO THIS FIGURES
HERE AND I'LL TRY. SET REID ZERO
KEEP A WHOLE THING. THERE CITY.
OKAY. SO THIS IS YOUR THIS
ILLUSTRATES THE FLOWER OF TAX
PAYMENTS FOR THE RETAIL EXCISE
TAX AND THE CULTIVATION TAX-
SOME UNDER CURRENT LAN BEFORE
BUSINESSES MAKE TAX PAYMENTS TO
THE STATE WE HAVE A NUMBER OF
OTHER PAYMENTS WE HAVE OUR
PAYMENTS FROM BUSINESSES TO
OTHER BUSINESSES- SO IN THE CASE
THE CULTIVATION TAX THE I TAX
LIABILITY ORIGINATES OF THE
CULTIVATOR AND THEN THAT
PAYMENTS FLOWS SOMETIMES THROUGH
SEVERAL BUSINESSES UNTIL IT GETS
TO THE LAST DISTRIBUTOR- AND SO
THAT'S REALLY A QUITE A
SIGNIFICANT PROBLEM LESTER FOR
THE RETAIL EXCISE TAX IT'S JUST
SORT OF- FROM THE RETAILER TO BE
LAST DISTRIBUTOR AT THAT. POINT
I DISTRICT U. S. OF ONE OF THE
ISSUE WITH THE TAXES- AND JUST
TO UP- I WILL HIGHLIGHTS. ON SO
OF THE WRECK. ARE FROM A REPORT
THAT OUR OFFICE PUBLISHED IN
TWENTY NINETEEN WHICH WAS
REQUIRED BY PROPOSITION SIXTY
FOUR SO THESE RAM
RECOMMENDATIONS REFLECT THE
SEQUENCE OF. THREE MAJOR POLICY
CHOICES REGARDING CANNABIS TAX
THE FIRST THERE'S THE CHOICE OF
WHAT TYPE OF TAX TO LEVY. OUR
PRIMARY RECOMMENDATION IN OUR
REPORT WAS TO REPLACE THE
STATE'S CANNABIS TAXES WITH A-
C. BASED OR TIERED AND ALARM TAX
ALTERNATIVELY IF EASE OF
ADMINISTRATION AND COMPLIANCE IS
THE TOP POLICY PRIORITY HE
LEGISLATURE COULDN'T STICK WITH
THE RETAIL ACCESS TAX. EITHER
WAY WE RECOMMENDED ELIMINATING
THE CULTIVATION. SECOND WE
RECOMMENDED COLLECTING TAXES
FROM BUSINESSES THAT PARTICIPATE
DIRECTLY IN WHATEVER ACTIVITY IS
BEING TAXED SO THAT WOULD MEAN
FOR EXAMPLE COLLECTING THE
RESALE ACCESS TAX FOR RETAILERS
RATHER THAN. DISTRIBUTORS AND
THIRD WE NOTED THAT THE
LEGISLATURE REASONABLY COULD
CONSIDER- A WIDE RANGE OF TAX
RATES FOR WHATEVER TAX IT
ULTIMATELY SELECT. SO THAT
CONCLUDES MY PREPARED REMARKS
AND I WOULD BE HAPPY TO TAKE
QUESTIONS AT THE APPROPRIATE.
OKAY GREAT THANK YOU NEXT WE
WILL HEAR FROM GREG MINOR WITH
THE CITY OF OAKLAND. AND THERE
CAN YOU HEAR ME OK I CAN'T. VERY
GOOD AFTERNOON- THANK YOU FOR
THE OPPORTUNITY TO SPEAK TODAY I
KNOW YOU HAVE A LOT OF SPEAKERS
SO. I WILL TRY TO BE BRIEF- JUST
A QUICK INTRODUCTION I'VE
OVERSEEN THE PERMITTING OF
CANNABIS BUSINESSES IN THE CITY
OF OAKLAND SINCE TWENTY
FOURTEEN- AND IN TWENTY
SEVENTEEN I CO AUTHORED. WITH MY
COLLEAGUE DARLING PLAN- THE CITY
OF OAKLAND'S RACE IN EQUITY
ANALYSIS ARE CANNABIS INDUSTRY
AND CREATED THE- NATION'S FIRST
CANNABIS EQUITY PROGRAM- SO IN
TERMS OF THE- THE TOPIC AT ISSUE
TODAY- I WOULD OFFER THAT. THE
CANNABIS INDUSTRY SHOULD BE
TAXED SIMILAR TO ANY OTHER
INDUSTRY- BUT THE QUESTION
BEFORE THE COMMITTEE I WOULD
OFFER IS WHETHER THE TAX RATES
AT THE STATE LEVEL HAVE FALLEN
OUT OF BALANCE WITH MARKET
CONDITIONS TO THE POINT THAT WE
ARE DISCOURAGING. ENTREPRENEURS
AND CONSUMERS FROM PARTICIPATING
IN THE REGULATED MARKET AN
INTERN EMPLOYMENT OPPORTUNITIES
WITHIN THE REGULATED MARKET- AND
I THINK. EVERY INDUSTRY- YOU
KNOW POTENTIALLY SAY WE'RE BEING
TAXED TOO HIGH IF YOU LOWER THE
TAXES WE DO X. Y. Z. BUT I THINK
WHAT'S CRITICAL FOR THE
COMMITTEE AND THE STATE
LEGISLATURE TO CONSIDER. IS THAT
THE ANALYZE THESE QUESTIONS ARE
WITHIN CANNABIS IS UNIQUE
HISTORICAL- IN PRESENT DAY-
CONTEXT. SO IN TERMS OF
HISTORICAL CONTEXT YOU HAVE THE
WARRANT DRUGS WHICH IS
DISPROPORTIONATELY IMPACTED
PEOPLE COLOR PARTICULARLY
AFRICAN AMERICANS. I WAS IN
NUMEROUS AND I DIRECT AND
INDIRECT CONSEQUENCES IT PUTS
THAT THOSE COMMUNITIES AND
EXTREME DISADVANTAGE WHEN TRYING
TO PARTICIPATE IN THE REGULATED
MARKET- AND THEN YOU HAVE THE
FACT THAT CALIFORNIA HAS HAD A
THRIVING. UNREGULATED MARKET
SINCE AT LEAST THE PASSAGE OF
PROPOSITION TWO FIFTEEN IN
NINETEEN NINETY SIX. AND THEN
WHEN YOU FAST FORWARD TO TODAY
IN OUR PRESENT LANDSCAPE- NUMBER
ONE YOU HAVE. CANNABIS
ENTREPRENEURS YOU'RE LIKELY TO
HEAR- ON THE PANEL FACED A
NUMBER OF BARRIERS AND IN TERMS
OF PARTICIPATING IN THE
REGULATED MARKET- FIRST OFF YOU
HAVE COMPETITION FROM
UNREGULATED MARKET. SECONDLY
CANNABIS BUSINESSES ARE
BASICALLY BASED AT A HIDDEN TAX
FROM. EVERY THE ENTIRE. RANGE
OF- THE COMMERCIAL SECTOR
LANDLORDS INSURANCE COMPANIES
SECURITY COMPANIES ALL CHARGE
CANNABIS BUSINESSES A HIGHER
RATE THAN A NON CANNABIS-
EQUIVALENT MIGHT BE CHARGED.
CANNABIS BUSINESSES LACK ACCESS
TO BANK BANKING YOU CAN'T GO TO
A BANK AND SAY CAN I PLEASE HAVE
A LOAN TO START A CANNABIS
BUSINESS BECAUSE OF. FEDERAL
PROHIBITION- IF YOU HAVE
CANNABIS BUSINESSES BEING
TARGETED BY ARMED BURGLARS AND
ROBBERS- LOOKING TO TAKE THEIR
THEIR PRODUCTS OR CASH BECAUSE
OF THE BANKING ISSUE. AND THEN-
I THINK I MAYBE ALLUDED TO A
QUIRK BUT OPERATORS THEN HAVE TO
PAY FOR SECURITY- JUST TESTED
OPERATING A REGULATED MARKET.
AND THEN- SECONDLY CANNABIS
ENTREPRENEURS AND CONSUMERS CAN
JUST PARTICIPATE NON REGULATED
MARKET- I DON'T KNOW HOW OTHER
INDUSTRIES HAVE THAT SAME
OPTION- AT LEAST NOT KNOW WHERE
TO THE EXTENT THAT YOU HAVE IN
THE CAN. THREE AND THEN- IF
ENTREPRENEURS CAN BE SUCCESSFUL
IN THE REGULATED MARKET THAT
MINIMIZES OPPORTUNITIES FOR
HIRING EMPLOYEES- SO. IN
CONCLUSION- THE CITY OF OAKLAND
. HAS LOWERED ITS TAX RATES.
HUGE HUGE- ENTREPRENEURS AND%
EMPLOYMENT. WITHIN THE REGULATED
MARKET AND I AM ENCOURAGED TO
CAN- COMMITTEE IN THE STATE
LEGISLATURE TO. TAKE STEPS IN
THAT DIRECTION THIS YEAR- TO
ENSURE THAT THE REGULATED.
INDUSTRY REFLECTS CALIFORNIANS-
TRUE DIVERSITY AND I'M AVAILABLE
FOR ANY QUESTIONS UNTIL THREE
PM- WHEN AT THE HOP OFF AND
THEN. I CAN FOLLOW UP WITH THE
STAFF OF THE EMAIL G. MINOR AT
OAKLAND CA DOT GOV- IF ANY
QUESTIONS COME UP AFTER THREE
O'CLOCK. THANK YOU AGAIN. FOR A
DOCTOR TO MAYBE SPEAK. THANK YOU
MINER- I WAS MADE AWARE OF THE
FACT THAT YOU HAVE A HARD STOP
AT THREE ORDINARILY WE ASK FOR
QUESTIONS AFTER EVERYONE HAS-
PRESENTED. BUT I'M GOING TO MAKE
AN EXCEPTION NOT RIGHT NOW BUT
BEFORE THREE SO THAT IF ANYONE
HAVE ANY SPECIFIC QUESTIONS FOR
YOU YOUR AVAILABLE TO ANSWER
THEM. NO PROBLEM THANK YOU OKAY
GREAT SO NEXT WE'RE GOING TO
HAVE A HAMBURGER CENTER WHO IS
THE EXECUTIVE DIRECTOR OF
SUPERNOVA WOMEN. WE SEE YOU. HI
THERE- AND THANK YOU AGAIN FOR
INVITING ME TO JOIN THE
DISCUSSION TODAY. HI MY NAME IS
AMBER CENTER I'M A CO FOUNDER
EXECUTIVE DIRECTOR AND CHAIRMAN
OF SUPERNOVA WOMEN AT SUPERNOVA
WOMEN AS A FIVE OH ONE C. THREE
NONPROFIT FOUNDED IN TWENTY
FIFTEEN. OUR AND WE WORK TO
CREATE OPPORTUNITIES FOR BLACK
AND BROWN PEOPLE HI AND THE
REGULATED CANNABIS MARKET.
ADDITIONALLY THE CEO OF MAKER
HOUSE ARE A CANNABIS
MANUFACTURING DISTRIBUTOR AND
BRAND HOUSE ARE HEADQUARTERED IN
OAKLAND. AND I OPERATE AND
MANAGE EQUITY WORKS INCUBATOR
WHICH IS A SHARED MANUFACTURING
FACILITY THANK YOU BATES SOCIAL
EQUITY OPERATORS IN OAKLAND. I'M
HERE TODAY TO SPEAK ABOUT THE
CRAFT CANNABIS INDUSTRY AND- ARE
WE ARE IN CRISIS AND I WANT TO
ENSURE THAT MY COMMUNITY
SURVIVES. DEMANDING THE
ELIMINATION OF THE CULTIVATION
TAX AND THE SUSPENSION OF THE
EXCISE TAX FOR SOCIAL EQUITY
OPERATORS FOR A MINIMUM OF SIX
YEARS. FOR MORE THAN FORTY YEARS
OF BLACK AND BROWN PEOPLE WERE
LOCKED UP AND DENIED FREEDOMS
FOR THE SAME ACTIVITY THAT IS
ENRICHING THE PURSE STRINGS OF
MANY LARGE CANNABIS CORPORATIONS
TODAY. THERE ARE STILL MANY
BLACK AND BROWN PEOPLE AND CAR
SERRATED FOR CANNABIS. EMERALD
TRIANGLE LEGACY FARMERS HAVE
ALSO SUFFERED BECAUSE OF THE
FAILED WAR ON DRUGS. PROPOSITION
SIXTY FOUR HAS FALLEN SHORT ON
ITS PROMISE TO RIGHT THE WRONGS
INFLICTED UPON BLACK AND BROWN
COMMUNITIES IMPACTED BY THE WAR
ON DRUGS. IT HAS ALSO
PERPETUATED REGRESSIVE WAR ON
DRUGS TWO POINT OH POLICIES
THROUGH OPPRESSIVE TAXATION
WHICH MUST END. AND THIS IS OUR
CRIED FOR HELP. DURING THE WEEK
OF NOVEMBER FIFTEENTH AND TWENTY
TWENTY ONE ARMED ROBBERS IN
OAKLAND AND SAN FRANCISCO FORCED
THEIR WAY INTO MORE THAN TWENTY
LICENSED CANNABIS BUSINESSES.
VANDALIZING STORES OFFICES AND
FACILITIES. HUMILITY SIMPLY BE
SMALL AND MOSTLY BLACK AND BROWN
AND EQUITY LICENSE BUSINESSES
SUFFERED OVER FIVE MILLION
DOLLARS IN LOSSES. EVEN MY
INCUBATOR EQUITY WORKS WAS
BROKEN INTO AND BURGLARIZED.
WHEN WE SUFFER LOSSES LIKE THIS
IN ADDITION TO THE INCREASINGLY
ONEROUS TAXES. WE DO NOT HAVE
THE RUN WAY TO RECOVER.
ROBBERIES ARE PLAGUING SMALL
BLACK BROWN IN EQUITY OPERATORS
LIKE ME. BECAUSE OF THE LACK OF
SAFE BANKING ROBBERS KNOW THAT
THERE'S A CHANCE THAT WE MAY
HAVE A STAGE STOCKED WITH CASH.
THERE'S ALSO THE LACK OF
INSURANCE. MOST CANNABIS
BUSINESSES ARE SOUND AND LOW
INCOME HIGH CRIME AREAS WHERE
THEFT INSURANCE ON OUR INVENTORY
IS NOT EVEN AN OPTION. THIS
PROBLEM IS NOT EXCLUSIVE TO
BRICK AND MORTAR OPERATIONS. ARE
DELIVERY DRIVERS ARE AT GREAT
RISK VENTURING OUT ON THEIR OWN
WITH NO PROTECTION. WE WERE
DEEMED ESSENTIAL EARLY IN THE
PANDEMIC. WHERE IS OUR SENSE OF
RELIEF AND ARE ESSENTIAL EIGHT.
THE CITIZENS OF CALIFORNIA NEED
US OUR INDUSTRY AND BUSINESSES
ARE WORTH SAVING. THE PRICE OF
CANNABIS HAS CRASHED AS LOW AS
THREE HUNDRED DOLLARS PER POUND
. THE CANNABIS CULTIVATION TAX
THE SET AT A FIXED RATE OF ONE
HUNDRED AND SIXTY ONE DOLLARS
AND INCREASES ANNUALLY. SMALL
CANNABIS CULTIVATORS HAVE BEEN
SET UP FOR DISASTER THIS IS NOT
SUSTAINABLE. FACING THE
INCREASED THREAT OF ROBBERIES
AND VIOLENCE PLUMMETING CANNABIS
PRICES AND INSTABILITY IN THE
MARKET AND THE PILING ON OF
INCREASED TAXATION IS PROVING TO
BE UNBEARABLE FOR OPERATORS. I'M
DEMANDING DEMANDING RELIEF FROM
MY COMMUNITY TO ENSURE OUR
SURVIVAL. IF WE DON'T SURVIVE
THERE WILL BE NO CANNABIS TAX
REVENUE. THIS IS NOW IN THE
HANDS OF THE STATE. PLEASE ADOPT
RELEASED AS EARLY AS POSSIBLE.
RESCUE ARE ESSENTIAL INDUSTRY
AND SAVE OUR CALIFORNIA'S CRAFT
CANNABIS MARKET. PLEASE HELP US
BUILD BACK WHAT WE'VE LOST THANK
YOU SO MUCH. THANK YOU FOR THAT
M. AND SO NEXT WE WILL HEAR FROM
. RESTON HYDEL BARK WITH THE
TEAMSTERS AND I HOPE I GOT YOUR
LAST NAME YOU NAILED IT YEAH.
IT'S GREAT TO HEAR MOTIONS RIGHT
NOW GO THERE. THANK YOU MADAM
CHAIR AND SOME MEMBERS THANK YOU
FOR GIVING US THE OPPORTUNITY TO
DISCUSS OUR POSITION REGARDING
CANNABIS TAX COLLECTION MY NAME
IS KRISTIN HOW TO WALK I SERVICE
THAT CANNABIS DIVISION DIRECTOR
FOR. THE INTERNATIONAL
BROTHERHOOD OF TEAMSTERS- SIX
SINCE TWO THOUSAND SIXTEEN THE
TEAMSTERS HAVE SUPPORTED AND
CONTINUE TO SUPPORT THE
COLLECTION OF CANNABIS TAXES AND
REMITTANCE I'M SAID TAXES AND
THE DISTRIBUTOR. WE FEEL THIS IS
THE BEST WAY TO PRESERVE THE
INTEGRITY OF THE SUPPLY CHAIN
AND TO ENSURE THAT ALL TAXES ARE
PROPERLY COLLECTED AND REMITTED
TO THE PROPERTY TAX COLLECTION
AGENCY. DISTRIBUTION SERVICE OR
CANCER AS CHECKS AND BALANCES
AND HELPS ENSURE COMPLIANCE. WE
DO FEEL THAT IN ORDER TO PROTECT
THE DISTRIBUTOR FROM VENDORS
THAT DELAY TAX PAYMENT WERE NOT
PAID AT ALL ADDITIONAL
PROTECTIONS MIGHT BE CONSIDERED
THESE PROPOSALS SHOULD
STRENGTHEN THE ROLE OF THE
DISTRIBUTOR. WE'VE SEEN HOW
STRONG AND WELL REGULATED
DISTRIBUTOR SYSTEM IN THE
ALCOHOL INDUSTRY. HAS LED TO
SIGNIFICANT UNION DENSITY AND
EFFICIENT AND ROBUST TAX
COLLECTION IT IS TOO SOON TO
DISMANTLE THE RESPONSIBILITIES
OF A CANNABIS DISTRIBUTOR THERE
ARE OTHER MEANS THAT CAN BE
CONSIDERED THAT CAN AID IN
REDUCING THE ILLICIT MARKET AND
BOLSTER TAX COLLECTION. I ALSO
WOULD LIKE TO REITERATE THAT THE
TEACHERS WILL CONTINUE TO HOLD
THE LINE WITH OUR LABOR PARTNERS
WHO ARE SCHEDULED TO SPEAK AFTER
ME I KNOW THAT YOU'RE C. W.'S
EXPLORING A TAX CREDIT FOR
CANNABIS EMPLOYERS. THAT CREATE
HIGH ROAD CAREER SUSTAINING JOBS
IN THE INDUSTRY WHO WERE
SUPPORTIVE IN CONCEPT AND LOOK
FORWARD TO HEARING MORE.
OTHERWISE OUR POSITION IS REMAIN
THE SAME SINCE TWO THOUSAND
SIXTEEN. WE WOULD LIKE TO SEE
THE TAX COLLECTION REMAIN AT THE
DISTRIBUTOR LEVEL THANK YOU FOR
YOUR TIME. THANK YOU. WE HAVE
NOW TERRY BRANDON S. E. I. U.
PARDON. HI IS KERRY I THOUGHT-
GAS TAX BUT I'M HAPPY TO COMMENT
I WILL KEEP IT- VERY QUICK IN
THE INTERESTS TIME- S. CI USE
PERSPECTIVE IS A LITTLE BIT
DIFFERENT THAN SOME OF OUR LABOR
PARTNERS WE SUPPORT ALL THEIR
EFFORTS IN THIS ARENA BUT THE
COMPLICATION WITH THE CURRENT-
TAX. AND STRATEGY IS THAT WE'VE
DEDICATED A LOT OF THE REVENUE
WHO- PROJECT INTEREST BOTH TO
ASK YOU ARE YOU AND OTHER
INTERESTED PARTIES AND WHILE
TAX FROM WHICH STORES AND- THE
SORT OF MAX- WE UNDERSTAND. THAT
UPDATED NEED TO PRESERVE
DISTENDED TREE AND I KEEP IT
GOING IT'S IMPORTANT. AS IS THE
NEED TO ENSURE THAT THE REVENUE
STREAMS THAT ARE GOING TO THE
PROGRAMS ARE NOT IN IRAQ HAVING
SAID THAT IT SEEMS IMPORTANT
THAT IF THE GOVERNOR DID
MINISTRATION THE LEGISLATURE SEE
FIT TO RESTRUCTURE THIS REVENUE-
COLLECTION AND REVENUE STREAM.
THAT THEY ENSURE THERE ARE NO IF
WE'RE GOING TO TAKE THIS GAMBLE
WHICH WE CONSIDERED TO BE. ON
THAT NEWS SURE THAT WE PRESERVE
THE REVENUES THAT ARE FLOWING
TO- THINGS LIKE CHILD CARE.
EARLY EDUCATION PREVENTION. HEY
GIRL OUT. UP AND TO END WOULD
WANNA MAKE SURE THAT THAT ONE
THERE WERE A SENSE ON WHATEVER
STRATEGIES DEVISED AND SECONDLY
THAT ANY REVENUES ARE BACK
FILLED TO THE PRESUMED LEVELS
THEY WOULD BE UNDER THE CURRENT
SCENARIO. I THINK THEY'RE
SUFFICIENT ONE TIME MONEY IN THE
BUDGET- THIS YEAR AND GOING
FORWARD THANK YOU COULD SET
ASIDE SOME TO ENSURE THAT- IF
THERE IS A LOSS IN REVENUE IF
THERE IS A DROP IN REVENUES.
THAT THESE PROGRAMS ARE CONTINUE
G. TO BE FUNDED AT THEIR
EXPECTED LEVELS. BY THAT AT ALL
TURN OVER THE NEXT SPEAKER THANK
YOU. AND NEXT WE WOULD HAVE-
LET'S SEE. CHRISTIAN HYDERABAD
YES WHICH ONE. YES. FOR ME THIS
ORDER. JESSE THREE WILL UNITED
FOOD AND COMMERCIAL WORKERS
KATHY PLEASE PROCEED. THANK YOU
GOOD AFTERNOON CAN YOU ALL HEAR
ME. YES WONDERFUL THAT AFTERNOON
CHERRY COMMITTEE MEMBERS MY NAME
IS JESSE GRANT WHILE LEGISLATIVE
DIRECTOR WITH THE UNITED FOOD
AND COMMERCIAL WORKERS UFCW
WESTERN STATE COUNCIL THANK YOU
FOR INVITING US TO TESTIFY AT
TODAY'S HEARING ON BEHALF OF OUR
THOUSANDS OF UNIONIZED CANNABIS
MEMBERS. IT IS NO SURPRISE TO
THIS COMMITTEE THE UNIQUE
CHALLENGES THIS YOUNG LEGALIZED
CANNABIS INDUSTRY CURRENTLY. AS
CALIFORNIA CONTINUES TO BATTLE A
THRIVING ILLICIT MARKET.
CALIFORNIA'S ILLICIT MARKET IS
ESTIMATED TO BE ROUGHLY EIGHT
BILLION DOLLARS WHICH IS ABOUT
THAT WHICH IS ABOUT DOUBLE THE
AMOUNT OF LEGAL SALES AND SOME
ESTIMATES HAVE THIS AS EVEN
HIGHER. A THRIVING ILLICIT
MARKET IS HAVING AND WILL
CONTINUE TO HAVE SIGNIFICANT
IMPACTS ON WORKERS IN THE
CANNABIS INDUSTRY SUCH AS
EMPLOYERS BEING ABLE TO MAINTAIN
HIGH WORKER STANDARDS AND
EXPANDING THE WORKFORCE.
CURRENTLY I UNIONIZE CANNABIS
SHOPS WERE SAYING LAYOFFS AND A
SHOCKING RATE OF UPWARDS OF
SIXTY SEVEN PERCENT. AS ILLEGAL
AS THE LEGAL CANNABIS INDUSTRY
CONTINUES TO BE TAXED UP 270% IN
SOME REGIONS IF THE W. WOULD
LIKE TO SEE TARGETED RELIEF IN
THE FORM OF TAX CREDITS. FOR
HIGH ROAD EMPLOYERS IN THE
CANNABIS INDUSTRY TO BETTER
COMPETE WITH THE ILLICIT
CANNABIS MARKET. UCW STRONGLY
BELIEVES THAT LICENSED CANNABIS
OPERATORS WHO DO THE RIGHT THING
NEW TO THE LEGAL REGULATED
MARKET ARE PAYING LIVING WAGES
OFFERING WORKER BENEFITS
PROMOTING HEALTH AND SAFETY AT
THE WORKPLACE AND PARTNERING ON
AN OFFERING WORKFORCE
DEVELOPMENT PROGRAMS. SHOULD BE
ELIGIBLE FOR TAX RELIEF THROUGH
TAX CREDITS AND POSITION
THEMSELVES TO BE ACTIVE RIGHT
VISIT IN THEMSELVES SAID ATTY
ABLE TO BETTER COMPETE AND NOT.
IN THE MARKET PLACE. EMPLOYERS
REYES. OF LIVING FOR WORK AND
THEIR- INVESTMENTS IN TRYING
REDUCE PUBLIC TOWARDS COMP. AND
I'M IN AND- HI PLAYERS. IN PRADA
. AND EMPLOYEE THE BILL. THAT
WAS IN LONG TERM. THAT STAY.
HOUSEHOLDS AND COMMUNITIES. AND
LASTLY HIGHROAD EMPLOYERS ARE
ENGAGEDIN STATE AND LOCAL
ENVIRONMENTAL INITIATIVES TO
REDUCE GREENHOUSE GASES. GAS
EMISSIONS AND PREPARE THEIR
COMPANY WORKFORCE FOR A CARBON
CONSTRAINED FUTURE. AS FOR ALL
THESE REASONS AND MORE THAT YOU
SEE W. WOULD LIKE TO SEE THE
LEGISLATURE AND ADMINISTRATION.
ADOPTED STATEWIDE TAX CREDIT
PROGRAM FOR HIGH ROAD EMPLOYERS
AND BONAFIDE SOCIAL EQUITY
APPLICANTS. TO PROVIDE TARGETED
RELIEF TO HIRED EMPLOYERS THAT
MAY BE INDUSTRY THE WORK FORCE
THE COMMUNITIES FORWARD WHILE
PROVIDING A SAFETY NET FOR
PROGRAMS THAT RELY ON THESE TAX
REVENUES. THANK YOU FOR ALLOWING
US TO TESTIFY TODAY. THANK YOU
FOR YOUR TESTIMONY. NOW WE WOULD
HAVE CHRISTIAN HASSLE BACH.
CONSIDER BEVERLY BEVERLY YOU.
BEVERLY YOU. THANK YOU AND
MEDICARE MEMBERS BEVERLY YOU
WHAT YOU NEED TO BE ASKED ME
LOCAL THREE NINE THIRTY
REPRESENTING OVER HUNDRED FIFTY
FIVE THOUSAND HOME CARE AND
CHILD CARE PROVIDERS THAT
CALIFORNIA THANK YOU FOR THE
OPPORTUNITY TO SHARE OUR
PERSPECTIVE ON CAMPUS TAX
POLICIES WE RECOGNIZE THE
IMPORTANCE OF TAX REFORM FOR
LICENSED OPERATORS THEY CAN STAY
COMPETITIVE AGAINST THE
UNDERGROUND MARKET. BEING SAID
WE WOULD ECHO THE SENTIMENTS
EXPRESSED BY MY COLLEAGUE S.
YEAH YOU AND HIGHLIGHT THE
IMPORTANCE OF KEEPING CHILD CARE
FUNDING IN TAX NEED TO GROW
THESE REVENUES. LONG TERM. GOING
TO DEPARTMENTS SOCIAL SERVICES
APPROXIMATELY TWO HUNDRED NINETY
TWO POINT THREE MILLION OF
PROPOSITION SIXTY FOUR FUNDS
WERE ALLOCATED IN FISCAL YEAR.
TWENTY TWENTY ONE TO TWENTY
TWENTY TWO FOR CHAPTER SLOTS. IS
DOLLARS ALLOW AN ESTIMATED
TWENTY SIX THOUSAND SIX HUNDRED
YOUNGSTERS TO RECEIVE CHILD
CARE. THE SIGNIFICANT PORTION
THE CARE IS PROVIDED BY FAMILY
CHILD CARE PROVIDERS YOU W. S.
YEAH YOU REPRESENT. THESE
DOLLARS ARE PROVIDERS TO TAKE IN
CHILDREN A WAITING LIST FOR
DONNELLY FOR LOW INCOME WORKING
FAMILIES. ALLOW CARE FOR
FAMILIES DURING NONTRADITIONAL
OUR SKIN CARE FOR INFANTS AND
TODDLERS TO PROMOTE THEIR
EDUCATIONAL SUCCESS. WE ARE
CONSIDERING THE VARIOUS TAX
PROPOSALS AND THE CAUTION
AGAINST APPROACH THAT PICKED A
SPECIAL PROGRAMS AGAINST ONE
ANOTHER ESPECIALLY DURING A
BUDGET SURPLUS. AT THIS POINT WE
ARE OPEN TO A TAX BILL AND
CONCEPT. LOOK FOR TO CONTINUE
DISCUSSIONS WITH THE LEGISLATURE
MINISTRATION OTHER STAKEHOLDERS
TO THREAD THE NEEDLE TO HELP
STABILIZE LEGAL CAMPUS MARKET.
THANK YOU. THANK YOU REVIEW. OUR
NEXT WITNESS WOULD BE KAREN
WOULD SEND. GIVE US CONNECTIONS
CONNECTIONS. BEVERLY YOU. THANK
YOU GOOD AFTERNOON MADAM CHAIR
DISTINGUISHED MEMBERS OF THE
SUBCOMMITTEE AND STAFF AND KAREN
WHAT'S AND DIRECTOR OF
COMPLIANCE WITH HUMAN BRANDS
THANK YOU FOR THIS IMPORTANT
HEARING AND I APPLAUD THE
LEADERSHIP THAT BRINGS US HERE
TODAY SINCE TWENTY EIGHTEEN THE
STATE HAS COLLECTED THREE
BILLION DOLLARS IN CANNABIS TAX
REVENUE BUT STILL TWO THIRDS OF
THEIR SALES OCCUR AND UNLICENSED
KENNELS IN OTHER WORDS THERE'S
ROUGHLY EIGHT BILLION DOLLARS OF
UNTAPPED REVENUE ON THE TABLE.
TO ENSURE THE VIABILITY OF THE
CAMPUS TAX FUND AND CRITICAL
PROGRAMS THAT RELY ON ITS
FUNDING I'M HERE TODAY TO URGE
SUPPORT FOR COMPREHENSIVE TAX
REFORM THAT INCENTIVIZES
PARTICIPATION BY LOCAL
JURISDICTIONS CONSUMERS AND
UNLICENSED OPERATORS I LOOK
FORWARD TO THE DIALOGUE WITH YOU
DIRECTOR ELIA AND THE PANEL OF
WITNESSES ABOUT THE TAX REFORM
DESPERATELY NEEDED TO STABILIZE
THE LEGAL MARKET AND REALIZE THE
GOAL OF PROP SIXTY FOUR. HE WAS
IN TWENTY TEN TO POSITIVELY
CHANGE HOW THE WORLD VIEWS AND
USE OF CANNABIS. J. R. AWARD
WINNING PRODUCTS OF THE MOST
TRUSTED EDIBLES ON THE MARKET.
LIKEWISE CUBA SALES AND SERVICE
IS A LEADING STATEWIDE
DISTRIBUTOR OFFERING A PORTFOLIO
OF. BRANDS ACROSS ALL CATEGORIES
. ALL THE EMPLOYEES FOUR HUNDRED
PEOPLE AT OUR FACILITY OVER FOUR
HUNDRED PEOPLE AT OUR FACILITIES
IN OAKLAND AND LOS ANGELES. AND
OUR PRODUCTS ARE AVAILABLE IN
OVER EIGHT HUNDRED LICENSED
OUTLETS IN CALIFORNIA. EVEN AS
ONE OF THE LARGEST CANNABIS
COMPANIES WE STRUGGLE WITH
EXCESSIVE TAXES COSTLY
REGULATION UNFAIR COMPETITION
FROM THE ILLICIT MARKET. THE
COMPOUNDING COSTS OF FEDERAL
PROHIBITION AN EXPECTATION TO
DELIVER STATE REVENUES BEFORE
THE MARKET IS STABILIZE. FOR TEN
YEARS WE'VE INVESTED IN AN
INDUSTRY THAT IS POISED TO
COMPETE NATIONALLY AND WE ARE
COMMITTED TO DELIVERING THE
REVENUE PROMISED BY
LEGALIZATION. UNFORTUNATELY HIGH
TAXES PUBLIC WITH LOCAL BANDS
DISCOURAGE WIDESPREAD
PARTICIPATION IN THE LEGAL
MARKET AND LIMIT THE STATE'S
ABILITY TO COLLECT REVENUE. THE
LEADERSHIP NEEDED NOW IS THE
HORSE FIGHT TO AVOID THE SHORT
TERM FIX IN FAVOR OF
COMPREHENSIVE TAX REFORM BUT
INCENTIVIZES ROD PARTICIPATION
IN THE LEGAL MARKET BY ALL THE
PLAYERS. THE FACTS ARE BLEAK
SALES ARE DROPPING REVENUES ARE
RETREATING AND CONSUMERS ARE
FLEEING THE POLITICO REPORTED
THAT HIGH TAXES ON LOCAL BANDS
HAVE LED MOST OPERATORS TO CLOSE
SHOP. WE'VE FOR PERMISSIVE
JURISDICTIONS OR SILENCE OF THE
ILLICIT MARKET IN NOVEMBER BDS
ANALYTICS REPORTED THAT LEGAL
CANNABIS SALES IN CALIFORNIA
DROPPED. BY MORE THAN 11%
COMPARED TO TWENTY TWENTY AND IS
DOWN 8% FROM AUGUST TWENTY
TWENTY ONE. THE CDC FACIAL
HUNDRED SIXTY FIVE MILLION
DOLLARS A DECREASE IN LEGAL
SALES FROM Q. TWO TO Q. FOUR
NOTS REFLECTED IN A THIRTY FOUR
MILLION DOLLAR DECREASE IN THE
GOVERNOR'S PROPOSED CANNABIS TAX
FUND ALLOCATION. FIVE YEARS
AFTER LEGALIZATION ONLY 20% OF
THE MUNICIPALITIES. MADE ANY
LEGAL CANNABIS ACTIVITY THE FACT
IS THERE ARE FAR FEWER RETAILERS
IN THE STATE TODAY THAN THERE
WERE IN TWENTY FIFTEEN AND FOR
DISTRIBUTORS THE PROBLEM IS
ACUTE WE CAN COLLECT AND REMIT
CANNABIS TAXES FROM CULTIVATORS
AND RETAILERS WHICH IS A
FUNCTION REQUIRING SOPHISTICATED
ACCOUNTING HEIGHTEN SECURITY AND
MILLIONS OF DOLLARS AND WORKING
CAPITAL ALSO FLOAT TIMELY
PAYMENT OF EXCISE TAXES. BEFORE
THEY'RE COLLECTED FROM THE
RETAILERS. TAX COLLECTION BY
DISTRIBUTORS IS A FUNCTION OF
THE ALCOHOL TRADE THE
PROTECTIONS AFFORDED TO ALCOHOL
DISTRIBUTORS DO NOT EXIST FOR
US. WITHOUT AUTHORITY OR
REQUIRES FOR THE FALL PAYMENTS
CANNABIS DISTRIBUTORS ARE
SITTING ON MILLIONS OF DOLLARS
OF A. OUR DAT. A BUBBLE THAT
NGUYEN BURSTS WILL IMPACT SMALL
OPERATORS AND THOSE WITHOUT
ACCESS TO THE CAPITAL TO COVER
THE LOSS. I'M ENCOURAGED BY
TODAY'S HEARING AND THE ARRAY OF
TAX PROPOSALS INTRODUCED LAST
WEEK. BUT REVENUE NEUTRAL
SOLUTIONS WHILE POLITICALLY
EXPEDIENT ONLY RESULT IN SHORT
TERM RELIEF FOR CURRENT
OPERATORS. IT NEITHER
INCENTIVIZE PARTICIPATION NOR
MOVES THE NEEDLE ON CONSUMER
PRICE. EFFECTIVE TAX REFORM
SHOULD INCLUDE THE FOLLOWING.
BERMAN A SUSPENSION OF THE
CULTIVATION TAX A SIGNIFICANT
CUT IN THE EXCISE TAX TO
ENCOURAGE CONSUMER
PARTICIPATION. INCENTIVES TO
SUPPORT MORE RETAIL THROUGHOUT
THE STATE. OR FOR DISTRIBUTORS
TO BLUNT THE IMPENDING DEATH OF
ALL AN ADDITIONAL SUPPORT FOR
SOCIAL EQUITY OPERATORS. THE
GOAL OF PROP SIXTY FOUR WAS TO
TAKE CANNABIS PRODUCTION AND
SALES OUT OF THE HANDS OF THE
ILLEGAL MARKET USING THAT GUIDE
POST TODAY. WILL ENSURE THE
ECONOMIC VIABILITY OF THE
CANNABIS TAX FUND AND THE
CRITICAL PROGRAMS THAT RELY ON
ITS FUNDING TOMORROW. THANK YOU
FOR THE OPPORTUNITY AND I LOOK
FORWARD TO YOUR QUESTION. THANK
YOU SO MUCH SO NOW WE WILL HEAR
FROM ADRIAN KEYS AS SMALL
BUSINESS HOMESTEAD A SMALL HOME
SAID CANNABIS FARMER FROM
TRINITY COUNTY SO I SEE YOU
ADRIAN. THANK YOU THANK YOU VERY
MUCH FOR THE OPPORTUNITY TODAY
MY NAME IS ADRIAN KEYS I'M A
LICENSED CULTIVATOR ENTRY COUNTY
WHERE I'VE BEEN INVOLVED IN
LOCAL CANNABIS ADVOCACY FOR
NEARLY SEVEN YEARS I'VE HELD A
LOCAL LICENSE SINCE TWENTY
SIXTEEN. AND UNDERSTANDING
MEMBER AND PRESIDENT OF THE
BOARD OF THE TREATY COUNTY
AGRICULTURAL ST COUNTY'S PREMIER
CANNABIS TREATISES THE ISSUE
SINCE TWENTY NINETY I ALSO
SERVED AS A REGIONAL CHAIR ON
THE REGION'S COUNCIL. MY
HOMESTEAD FARM HOLDS A TEN
THOUSAND SQUARE FOOT OUTDOOR
LICENSE WITH SIX THOUSAND TWO
HUNDRED SQUARE FEET OF CANOPY I
WORK WITH MY WIFE AND NO
EMPLOYEES WE SUSTAINABLE
REGENERATIVE PRACTICES TO GROW
OUR OWN FOOD ALONG WITH
CANDIDATES AND HAVE NO ABILITY
TO FURTHER REDUCE COSTS. OUR
LADY LARGEST FIXED COST IS LOCAL
AND STATE LICENSING WITH THE
CULTIVATION TAX BEING THE
GREATEST COST OVERALL MY SMALL
FARM ALONE WAS RESPONSIBLE FOR
GENERATING NEARLY THIRTY THREE
THOUSAND DOLLARS. A CULTIVATION
TAX IN TWENTY TWENTY ONE. HI
INTO THIS MARK SEASON- WHOLESALE
PRICE OF FALLEN TO NO MORE THAN
FIFTY PER. OF LAST YEAR. MY
ESTIMATE FOR RETURNS THIS YEAR
WILL SHOW THE CULTIVATION TAX
BEING. 3250% OF THE FARMGATE
PRICE. AS PRICES CONTINUE TO
FALL THE TAX BECOMES
PROPORTIONATELY MORE IMPACTFUL.
EFFECTIVELY ABSORBING ANY OF MY
PROFIT MARGIN- THE TAX ON TRIM.
ACTUALLY EXCEEDS ITS WHOLESALE
PRICE BY AT LEAST A HUNDRED
PERCENT. AND APPLYING THE FLAT
RATE FLOWER TAX ON DIFFERENT
GRADES OF FLOUR FROM THE SAME
PLANT. ESSENTIALLY NULLIFIES THE
VALUE OF SMALLER BUGS WHICH
WOULD ENTER THE SUPPLY CHAIN IS
A LESS EXPENSIVE MANUFACTURING
GREAT. NO OTHER AGRICULTURAL
PRODUCT IS TAXED AT PRODUCTION
BEFORE IT'S EVEN SOLD. AND A
FLAT RATE TAX ON WEIGHT AND
COMMODITIES DRIVEN MARKET. ONLY
ENCOURAGES IMPACTFUL INTENSIVE
CULTIVATION METHODOLOGIES AND
OVERSUPPLY IN ORDER TO REDUCE
THE RATIO OF REGULATORY COSTA
PRODUCTION VALUE. WHEN
PROPOSITION SIXTY FOUR PASSED. I
WAS OPTIMISTIC AND HOPEFUL THAT
THE IMPLEMENTATION WOULD.
REALIZE THE GOALS EXPRESSED IN
THE BILL. CAN WE INVITE.
PROVIDING REASONABLE ACCESS OF
REGULAR REGULATED CANNABIS TO
CONSUMERS. AND TRANSITIONING THE
LEGACY MEDICAL INDUSTRY INTO
REGULATION. YOUR TO A NUMBER OF
FACTORS ONE OF WHICH IS
EXCESSIVE TAXATION AT THE FARM
GATE I DO NOT FEEL THE GOALS OF
PROPOSITION SIXTY FOUR BEING
REACHED. OVER THE LAST FEW
QUARTERS OF TWENTY TWENTY
RETAILS SALES AND THEIR
ASSOCIATED TAXES DECLINED FOR
THE FIRST TIME SINCE
LEGALIZATION. AND AFTER A TEPID
RECOVERY IN EARLY TWENTY TWENTY
ONE. REVENUES CONTINUE TO FALL
UP THE UNREGULATED MARKET IS IN
NO WAY SHRINKING. AND IS STILL
RESPONSIBLE 46270% OF ALL
CANNABIS SOLD AND CONSUMED IN
CALIFORNIA. AND ALL IF NOT MORE
OF THE ENVIRONMENTAL IMPACTS OF
UNREGULATED CANNABIS ACTIVITIES
CONTINUE. SMALL AND LEGACY
EQUITY FARMS AND BUSINESSES ARE
PARTICULARLY THREATENED BY
MARKET CONSTRUCTION AT THE
UNREGULATED MARKET. YOU TO OUR
SMALL SIZE LACK OF ACCESS TO
FINANCING THE COMPOUNDING TAXES.
MANY LOCAL JURISDICTIONS ACROSS
CALIFORNIA ARE TAKING THE LEAD
IN INTRODUCING THREE. FROM DIEGO
AND ONE IN THE SOUTHLAND. THE
OAKLAND ST. AND HUMBOLDT IN THE
NORTH. GOVERNMENT AND INDUSTRY
REPRESENTATIVES ARE
COLLABORATING TO FIND SOLUTIONS
THAT ENHANCE THE LEGACY IN
EQUITY BUSINESSES WHO HAVE MADE
CALIFORNIA FAMOUS FOR ITS CRAFT
CANNABIS. IT IS IMPERATIVE TO
THE LONG TERM HEALTH OF THE
CALIFORNIA CANNABIS INDUSTRY. TO
BRING OUR LEGACY IN EQUITY CRAFT
CULTIVATORS IN THE COUNTRY INTO
THE WRLD. MONITISE CANNABIS CAN
AND WILL BE PRODUCED AT A LOWER
EXPENSE IN REGIONS WHERE LAND
LABOR AND TAXES ARE CHEAPER.
IT'S NO SECRET THE CALIFORNIA
CRAFT CANNABIS IS WORLD CLASS
AND HAS A BUILT IN GLOBAL
DEMAND. AS WE STEADILY MOVED
TOWARDS FEDERAL LEGALIZATION AND
REGULATION. WE LOOK FORWARD TO
THE DAY WHEN WE CAN SHARE OUR
WORK WITH THE WORLD. PLEASE
SUPPORT OUR LIQUIDITY OUR LEGACY
AND EQUITY CULTIVATORS AND THE
IMPACT TO COMMUNITIES WHERE WE
LIVE BY PERMANENTLY REMOVING THE
KILL THE CULTIVATION TAX. WE ARE
CALIFORNIA CANNABIS- THANK YOU
VERY MUCH AGAIN FOR THE
OPPORTUNITY AND OUT ALL OF THE
AVAILABLE THIRTY QUESTIONS THANK
YOU. ALL RIGHT WELL THANK YOU
MISTER KEITH I LOVE THE PSA AT
THE END. SO NEXT WE WILL HEAR
FROM NICK MADURO'S WITH THE
CALIFORNIA DEPARTMENT OF TAX AND
FEE ADMINISTRATION I SEE YOU.
ANY GOOD AFTERNOON THANK YOU SO
MUCH FOR HAVING ME. I'M NICK
MAJERUS ON THE DIRECTOR OF CD
TFA OR THE CALIFORNIA DEPARTMENT
OF TAX AND FEE ADMINISTRATION.
WE ADMINISTER THREE- STATE TAXES
ON CANNABIS- SAID CHRISTINE
MENTION TWO OF THEM THE
CULTIVATION EXCISE TAX WHICH
APPLIES ONLY TO CANNABIS. WE
ALSO COLLECT THE SALES AND USE
TAX WHICH APPLIES GENERALLY TO
ALL SALES OF TANGIBLE PERSONAL
PROPERTY IN THE STATE. INCLUDING
CANNABIS. IN FISCAL YEAR TWENTY.
TWENTY TWENTY TWENTY ONE. THESE
THREE TAXES TOGETHER BROUGHT IN
JUST SHY OF ONE POINT THREE
BILLION DOLLARS IN REVENUE-
ALTHOUGH THAT FIGURE DOES
INCLUDE LOCAL AND DISTRICT
pCD TFA ADMINISTERS. ON BEHALF OF
THIS- CITIES AND COUNTIES ALL
ACROSS THE STATE. AS A GENERAL
MATTER WE'RE FOCUSED ON
ADMINISTERING OUR THIRTY EIGHT
TAX AND FEE PROGRAMS UNDER OUR
PURVIEW. LEAVING BROADER TAX
POLICY QUESTIONS TO POLICY
MAKERS AND OTHERS- CD TFA STANDS
READY TO ADMINISTER THE TAX IS
DETERMINED BY THE LEGISLATURE
AND THAT TOGETHER WITH THE
GOVERNOR- HOWEVER POLICYMAKERS
SEE FIT. BUT AS YOU CONSIDER
POSSIBLE REFORMS TO THE TAX
STRUCTURE OF ADULT USE CANNABIS
IN CALIFORNIA. I WOULD ENCOURAGE
YOU TO KEEP TWO IMPORTANT
PRINCIPLES IN MIND. FIRST TAXES
SHOULD GENERALLY BE A SIMPLE AND
EFFICIENT AS POSSIBLE. IDEALLY
THE TAX STRUCTURE SHOULD BE
RELATIVELY EASY FOR US TO
ADMINISTER. AND NOT OVERLY
COMPLICATED FOR TAXPAYERS HEY
NOW WE ALL KNOW THE TAXES ARE
FREQUENTLY COMPLICATED. BUT
CALIFORNIA'S CANNABIS TAX
STRUCTURE CAN BE PARTICULARLY
DIFFICULT TO NAVIGATE. AND THAT
COMPLEXITY IMPACTS OUR
ADMINISTRATION OF THE TAXES AND
AS YOU'VE HEARD FOR MANY OTHERS
IT ADDS TO THE BURDEN FOR
BUSINESSES. THAT ARE BEING
RESPONSIVE. IN TRYING TO ACHIEVE
HERE TO ALL OF THE STATE RULES.
SECOND I THINK IT'S IMPORTANT
THAT THE TAX STRUCTURE IS FAIR
TO THOSE BUSINESSES THAT ARE
DOING THEIR BEST TO COMPLY. WE
HAD CD TFA OFTEN HEAR FROM LEGAL
CANNABIS BUSINESSES THAT THEY
ARE BEING UNDERCUT BY THOSE
OPERATING FREQUENTLY QUITE
FLAGRANTLY OPERATING. OUTSIDE
THE LEGAL MARKET. TO ADDRESS
THIS PROBLEM AND TO BRING
FAIRNESS TO THE MARKET I THINK
IT'S IMPORTANT A CONSIDERATION
OF TAX CHANGES. ALSO INCLUDE
ROBUST ENFORCEMENT MEASURES TO
PREVENT ILLEGAL CANNABIS
OPERATORS FROM EXPLOITING THEIR
UNFAIR TAX ADVANTAGE EVEN IF THE
TAXES WERE LOWER. IF SOME PEOPLE
ARE PAYING IT AND SOME AREN'T
THERE'S STILL A VERY SIGNIFICANT
COST ADVANTAGE- TO OPERATING
OUTSIDE LEGAL MARKET THAT MUST
BE ADDRESSED. SO I THANK YOU FOR
THE OPPORTUNITY TO BE HERE TODAY
I'D BE HAPPY TO ANSWER ANY
QUESTIONS THAT. YOU MEMBERS OF
THE COMMITTEE MAY HAVE. THANK
YOU SO MUCH AND SO OUR FINAL-
PRESENTER IS NICOLE ELLIOTT WITH
THE DEPARTMENT OF CANNABIS
CONTROL. AND WE SEE YOU. GOOD
AFTERNOON CHAIR AND COMMITTEE
MEMBERS. LET ME FIRST BEGIN BY
THANKING THE COMMITTEE AND STAFF
FOR- YOUR WORKS YOU CAN MEET US
ALL HERE TODAY TO DISCUSS. I ONE
OF THE MOST PRESSING ISSUES FOR
OUR LICENSEES TAXES. MY NAME'S A
CLIENT I HAVE THE DISTINCT HONOR
OF SERVING AS THE DIRECTOR OF
THE NEW REFORMS DEPARTMENT OF
CAMPUS CONTROL. FROM THE OUTSET
OUTSIDE LET ME ACKNOWLEDGE THE
LIMITED NATURE OF THE
DEPARTMENT'S ROLE IN COMMERCIAL
CANNABIS TAXATION. WE DO NOT SET
TAX RULES OR RATE STEPS UP TO
THE LEGISLATURE AND THE VOTERS.
I AM WE DO NOT A MINISTER OR
COLLECTS TAXES THAT'S THE
RESPONSIBILITY OF MY PEER
DIRECTOR INTERESTED THE
DEPARTMENT OF TAX AND FEE
ADMINISTRATION. HOWEVER HAVING
SAID THAT THE DEPARTMENT IS
UNIQUELY SITUATED TO SHARE WHAT
WE ARE HEARING FROM OUR
LICENSEES. I IN THE PERSPECTIVE
OF THE ADMINISTRATION ON TAX
REFORM AND WHAT WE'RE HEARING
FROM LICENSEES AND CONSUMERS IS
THAT CALIFORNIA'S TAX STRUCTURE
PRESENTS SEVERAL CHALLENGES. THE
MOST OBVIOUS BEING THAT THIS THE
SENTIMENT THAT TAXES ARE JUST
TOO HIGH. I'M HOWEVER LICENSEES
ALSO SHARE WITH US HOW THE TAX
STRUCTURE POSES SIGNIFICANT
OPERATIONAL CHALLENGES. SOME OF
WHICH HAVE BEEN ALLUDED TO IN
COMMENTS TODAY. I FOR EXAMPLE WE
ARE TOLD THAT THE IMPOSITION OF
A FIXED TAX RATE ON CULTIVATORS
RATES TIED TO OVERALL INFLATION.
DOES NOT APPROPRIATELY CONSIDER
AGRICULTURAL MARKET FLUCTUATIONS
THEREFORE THIS TAX POLICY HAS
SHOWN TO UNEQUALLY BURDEN
FARMERS. PARTICULARLY SMALL
FARMERS AT A TIME WHEN MARKET
CONDITIONS ARE MOST CHALLENGING.
THE IMPOSITION OF MULTIPLE TAXES
FOCUSED ON MULTIPLE POINTS IN A
CANNABIS SUPPLY CHAIN. AS
EVIDENCED IN THAT CANDY L. A.
GRAPHIC MAKES THE SYSTEM I'M AN
ASSIST. AND IT MINUTES
BURDENSOME COMPLY OF THIS CAN
MAKE IT CHALLENGING FOR
OPERATORS TO TRACK TAXES OWED
AND PAID RESULTING IN THE NEED
FOR SOME TO EXPEND ADDITIONAL
RESOURCES TO REMAIN COMPLIANT.
WE CAN THE CURRENT STRUCTURE IN
WHICH BUSINESSES IN CASH BASED
INDUSTRY WITHOUT READY ACCESS TO
CAPITAL ARE ASKED TO PAY
ESTIMATED TAXES IN ADVANCE AND
SEEK REPAYMENT LATER. IS
ESPECIALLY CHALLENGING FOR
SMALLER OPERATORS WITH FEWER
ECONOMIC RESOURCES PARTICULARLY
SMALL OPERATORS AND EQUITY
OPERATORS. CONSIDERING THE
STRUGGLE SHARED BY LICENSEES WE
CONCUR WITH WHAT APPEARS TO BE A
SHARED SENTIMENT THAT TAX REFORM
IS NEEDED TO KEEP THE AND MOVE
OPERATORS AND CONSUMERS IN THE
REGULATED MARKET. WE ARE JOINING
THE GOVERNOR'S OFFICE IN ONGOING
CONVERSATIONS. WITH MEMBER
OFFICES AND STAKEHOLDERS TO
BETTER UNDERSTAND THEIR
POSITIONS ON TAX REFORM POLICY.
AND WE ARE CURRENTLY REVIEWING
TAX REFORM PROPOSALS RECENTLY
PUT FORWARD BY THE LEGISLATURE.
THE GOVERNOR'S OFFICE HAS
INDICATED THEY PLAN TO BRING THE
STAKEHOLDERS INCLUDING THE
LEGISLATURE AND INDUSTRY
TOGETHER TO HELP IDENTIFY A
SUSTAINABLE AND EQUITABLE TAX
REFORM SOLUTION THAT PROVIDES
RELIEF. TO THE CANNABIS INDUSTRY
WHILE ALSO MAINTAINING THE
INTEGRITY OF PROPOSITION SIXTY
FOUR WHICH PROMISED VOTERS
REVENUE FOR USED PROGRAMS
ENVIRONMENTAL PROTECTION. AND
ENFORCEMENT AGAINST THE ILLICIT
MARKET. I WOULD BE REMISS IF I
DID NOT TAKE THIS OPPORTUNITY TO
ALSO SHARE THAT CONCURRENT TO
TAX REFORM CONVERSATIONS. THE
DEPARTMENT OF CANNABIS CONTROL
IS WORKING DILIGENTLY TO FIND
WAYS TO REDUCE COSTS ASSOCIATED
WITH PARTICIPATING IN THE LEGAL
MARKET. SINCE THE DEPARTMENT'S
CREATION WE HAVE TAKEN STEPS TO
BETTER SUPPORT LEGAL BUSINESSES
FOR EXAMPLE WITHIN TWO MONTHS OF
THE DEPARTMENTS CREATE ANY TEXT
WEST ABSALOM EIGHT CONFLICTING
REQUIRE MIGHT REQUIREMENTS
STREAMLINE APPLICATION
REQUIREMENTS AND INCORPORATE A
PATHWAY FOR BUSINESSES. TO START
UTILIZING TRADE SAMPLES THROUGH
EMERGENCY REGULATIONS AND SINCE
THEN WE HAVE BEEN ACTIVELY
ENGAGING STAKEHOLDERS TO
IDENTIFY HOW WE CAN FURTHER
IMPROVE OUR REGULATIONS TO MAKE
IT EASIER. AND LESS COSTLY FOR
BUSINESSES TO ACHIEVE
COMPLIANCE. WE ANTICIPATE TAKING
A SIGNIFICANT STEP FORWARD ON
REGULATORY IMPROVEMENTS VERY
SOON HOWEVER THESE EFFORTS
REFLECT INITIAL STEPS THERE IS
SO MUCH OPPORTUNITY. IN CANNABIS
REFINING INSTANCE STRENGTH IN
THE FRAMEWORK IN WHICH WE
COLLECTIVELY DO OUR WORK. SO THE
DEPARTMENT WILL CONTINUE WORKING
ON THE REGULATORY FRAMEWORK ON
AN ONGOING BASIS THROUGH REGULAR
ROLE MAKING SURE HAT WE ARE
CONSTANTLY ADAPTING WITH THE
INDUSTRY APPLYING BEST PRACTICES
IN DOING OUR PART. TO FOSTER.
DIVERSE IN ALL IN CLOSE THE
COMMITTED TO DEVELOP OF CAMP TAX
. ABOUT IN. STRENGTHEN AND
STABILIZE THE LEGAL MARKET AND
DO WHAT AND THE END OF POLICIES
THAT DO NOT NEEDLESSLY BURDEN
CALIFORNIA'S LEGAL CANNABIS
INDUSTRY. THANK YOU FOR YOUR
TIME TODAY FOR THIS- FOR HIM TO
HAVE THIS DISCUSSION AND FOR
INVITING ME TO PARTICIPATE I
WILL REMAIN ON THE LINE FOR ANY
ADDITIONAL QUESTIONS. GREAT
THANK YOU FOR THAT NICOLE SO NOW
I AM- FLY BY THE SEAT OF MY
PANTS HERE BECAUSE I LEFT MY-
SCRIPT UPSTAIRS BUT THAT'S OKAY.
WE'RE NOW GOING TO OPEN IT UP TO
QUESTIONS FROM MEMBERS OF THE
COMMITTEE. AND I WANT TO REMIND-
COMMITTEE MEMBERS THAT WHEN YOU
ASK YOUR QUESTION PLEASE TURN ON
YOUR MIKE I ALSO WANT TO REMIND
MEMBERS OF THE COMMITTEE THAT
GREG MINOR WITH THE CITY OF
OAKLAND IS GOING TO LEAVE AT
THREE O'CLOCK AND SO IF YOU HAVE
ANY QUESTIONS SPECIFICALLY FOR
M. YOU KNOW IT WOULD BE GREAT TO
ELEVATE THOSE FIRST. SO MISTER
VICE CHAIR DO YOU HAVE ANY
QUESTIONS. LET JOURNALISTS HAD
COMMENTED ABOUT HOW THE ACTION
REVENUE WENT UP AND THEN LEVELED
OFF- GOOD HE EXPLAINED. THE
PHENOMENA WHAT HAPPENED. THE
CARD THAT. THANK YOU FOR THE
QUESTION CENTER NIELSEN- I'M NOT
SURE I MEAN I'M IN A POSITION AS
MUCH AS I THINK FOLKS WHO ARE-
TRACKING THE INDUSTRY IN MORE
DETAIL AYE AYE I COULD ELABORATE
A LITTLE BIT ON WHAT THE TRENDS
LOOK LIKE BUT I'M NOT SURE THAT
I'M IN A BETTER POSITION
NECESSARILY THEN THE OTHER.
PANELISTS TO- TO PROVIDE
EXPLANATIONS FOR THE CAUSES- I
WILL SAY WE HAD TO EXTRA JUST TO
RECAP- INITIALLY THE FIRST
QUARTER TO REVENUES THAT WERE- I
THINK CONSIDERABLY LOWER THAN
PEOPLE AND HELPING TO SERVE A
VERY SLOW START THERE. THEN A
VERY HIGH GROWTH RATES FOR- A
COUPLE YEARS AND IN PARTICULAR
EVEN ACCELERATING IN CALENDAR
YEAR TWENTY TWENTY SORT OF
DURING THE- FIRST. COUPLE
QUARTERS OF THE PANDEMIC REALLY-
VERY FAST GROWTH RATE AND THEN
ESSENTIALLY AROUND. THE END OF
TWENTY CALENDAR YEAR TWENTY
TWENTY AND- CONTINUING THROUGH
TWENTY TWENTY ONE REALLY THAT
THAT LEVELING OFF THAT YOU WERE.
REFERRING TO YOU AS FAR AS THE
INDUSTRY DYNAMICS UNDERLYING
THAT I'M I'M AFRAID ALL HAVE TO
A DEFERRED IT TO OTHER PANELISTS
ON THAT. IT I MAY NOT CHAIRMAN I
JUST THE QUESTIONS YEAH EVER OF
THE IN. TO LIKE TO SPEAK YES I
WAS GOING TO ASK IF SOMEONE FROM
THE INDUSTRY WANTED TO ADDRESS
IT OR EVEN NICK FROM CV FTA.
YEAH PARENTS THIS WHAT'S THAT.
HI GOOD AFTERNOON THANKS FOR THE
QUESTION- I DID IT IS AN
IMPORTANT ONE I'M A SPECULATION
IS THAT BAD DRAMATIC INCREASE
BETWEEN TWENTY TWENTY- AND THE
EARLY PART OF TWENTY TWENTY ONE
A REALLYHAS TO DO WITH PANDEMIC
SPENDING THAT THAT THAT THAT BUT
WE'RE PROBABLY GOING TO SEE A
DRAMATIC REDUCTION BACK TO THAT
TWENTY NINETEEN US LOST- I WAS I
SORT OF THE REAL THE REAL MARKET
THAT WE ARE SORT OF CONTENDING
WITH RIGHT NOW BUT WE DO BELIEVE
THAT THAT DRAMATIC INCREASE.
REFLECTED IN THAT ARE AMAZING-
VISUAL IT IS A REFLECTION OF
PANDEMIC SPENDING IN THE FACT
THAT WE WERE AFFORDED DURING THE
PANDEMIC THE OPPORTUNITY TO ONCE
THEY OPEN- AND TO- OPPORTUNITIES
LIKE CURBSIDE DELIVERY ZERO TO
ENSURE THAT CONSUMERS HAD.
ADDITIONAL. ADDITIONAL SAFE
ACCESS CHANNEL. OKAY GIVE ME TWO
MORE QUICK FOR NOW A PROBLEM
WILL HAVE MORE- WELL NOT MISTER
SENATOR AT NICK DID YOU ALSO TO
ADDRESS THAT. YES IF I MAY JUST
BRIEFLY. IS YOU LOOK AT THE
TOTAL REVENUE ACROSS THE THREE
TAXES WE SAW PEAK IN SECOND
QUARTER OF TWENTY TWENTY ONE-
AND PART OF THE GROWTH INITIALLY
IN THIS IS EARLIER THAN THAT
CERTAINLY IS THAT ONCE WE HAVE
ENOUGH DATA IN OUR SYSTEM FOR
SALES THE- STATEWIDE AVERAGE
RETAIL MARKUP MOVED FROM 60%
280% TO MORE ACCURATELY REFLECT
THE ACTUAL MARKET. WHICH DID-
RESULT IN A BOOSTING TAX
REVENUE- THAT I THINK ALSO IS
REFLECTED IN SOME OF THAT-
SIGNIFICANT GROWTH. IF ANYONE
WOULD BE WILLING TO COME AT A
LOT OF TESTIMONY HERE ABOUT THE
PLIGHT. OF THE PRODUCERS. AN
THE BUSINESS PEOPLE. BUT NOT
MUCH COMMENT ABOUT THE ILLEGAL
MARKET THE- FISHKEEPING THESE
TAXES SOME OF THE WITNESSES I'D
APPRECIATE IF ANY OF THEM OR
SOMEONE. WOULD COMMENT ON THEIR
SUGGESTIONS AS TO HOW. THE
LEGISLATURE AND THE GOVERNOR CAN
ACT. TO CUT DOWN ON THE ILLEGAL
MARKET OUT THERE DELEUZE'S
SCRAPING IT SOUNDS LIKE ENORMOUS
REVENUE. THEY'RE AVOIDING. ANY
IDEAS ON HOW WE CAN DEAL WITH
THAT MASSIVE PROBLEMS. LET'S
HEAR AYE MR KEYES- I SEE YOUR
HAND UP. THANK YOU I DON'T
BELIEVE MINE WAS UP FIRST BUT IF
IT'S A IF IT'S APPROPRIATE I'LL
CONTINUE ON. I THINK THEY
EXPANDED RETAIL ACCESS IS IT
THERE'S A THE FUNCTIONALITY OF
RETAIL ACCESS THAT ALLOWS PEOPLE
WHO WOULD PARTICIPATE IN THE
REGULATED MARKET DID YOU SELL
AND IS THERE IS NO ACCESS- BROKE
MOST OF THE INTERIOR OF NORTHERN
CALIFORNIA THERE'S VERY LIMITED
ACCESS. YEAH AGAIN THIS IS STILL
BEING CONSUMED THERE AREN'T.
SITE THAT'S NOT WOULD BE MY TAKE
ON OF MY CULTIVATORS PERSPECTIVE
I THINK THAT THERE WERE A LOT
OF. A LOT OF ESTIMATES AND
FORECASTS THEY WERE YOUR
PROJECTIONS THAT CAME ABOUT TO
DO AT THE ONSET OF SIXTY FOUR.
AND YOU KNOW A LOT OF THESE
LOCAL JURISDICTIONS MANY OF WHOM
VOTED NO THEIR POPULOUS VOTED TO
APPROVE PROPOSITION SIXTY FOUR.
HAVE CHOSEN TO BATTLE ACTIVITIES
AND- USE THE REGULATION AS AN
ATTEMPT TO REINSTALL PROHIBITION
THAT'S MY TAKE. I DON'T KNOW IF
MISTER MINER OR MISS CENTER. AND
I HOPE I'M USING CORRECT
PRONOUNS IF YOU ALL WANTED TO
MAYBE ADDRESS THE QUESTION. I
DON'T KNOW OKAY I SEE. AMBER DO
YOU WANT TO JUMP IN. ARE YOU CAN
GO FIRST AND I'LL GO AFTER YOU
AND I JUST NEED TO APOLOGIZE I
DON'T SEE EVERYONE ON MY SCREEN
SO I AM JUST CALLING ON THE
PEOPLE THAT POP UP FIRST SO. IF
THERE'S IF YOU ALL WANT TO BE
RESPECTFUL OF EACH OTHER AND
NEWSWORLD. YOU SURELY CAN BUT-
I'LL TRY TO BE BRIEF SO I THINK
REDUCING TAXES ON THE REGULATED
MARKET WILL HELP- IT'S NOT GOING
TO SOLVE EVERYTHING IN TERMS OF
THE UNREGULATED MARKET BUT IT'LL
- IT'LL RIGHT INCENTIVE FOR
THOSE CONSUMERS PURCHASING FROM
THE RADIO I'M REGULATED MARKET
TO PURCHASE THAT SAME OR
INEQUIVALENT PRODUCT IN THE
REGULATED MARKET WE HAD AN
EXISTING MATTER YOU KNOW
CONSUMER BASE THAT ALL OF A
SUDDEN HAD TO PAY FOR MORE FOR
THE SAME OR EQUIVALENT PRODUCT.
AND NOT ALL OF THEM OR MANY OF
THEM HAVE BEEN TRANSITION TO THE
REGULATED MARKET BEFORE ABLE TO
REDUCE THE TAXES THE REGULATED
MARKET MAYBE THAT WILL HELP
ENCOURAGE SOME OF THESE
CONSUMERS TO COME BACK- SO
THAT'S THAT'S ONE SUGGESTION
OBVIOUSLY ENFORCEMENT ON ITS OWN
THERE'S A THERE'S A NEED FOR
ENFORCEMENT BUT- ON ITS OWN I
THINK IT'S A LITTLE. IT'S A-
UNREALISTIC TO EXPECT CONSUMERS
TO NOT TRANSITION TO THE
REGULATED MARKET WITHOUT A
REDUCTION IN TAX RATES THE END
OF THE DAY THAT'S HOW WE ALL
MAKE OUR DECISION A LOT OF OUR
DECISIONS HOW WE SPEND OUR
MONEY. REGARDLESS OF THE CONTEXT
. BOB AND BUT YOU KNOW BUT
THAT'S- IT'S AN OPINION BASED ON
YOU KNOW THE EXPERIENCE OF
INTERACTING WITH OPERATORS HERE
IN OAKLAND AND ALSO WITH SOME OF
THE CHALLENGES IN IN TRYING TO
ENFORCE OUR WAY. OUT OF A
PROBLEM. GREAT THANK YOU FOR
THAT THANK YOU AND MISS CENTER
DID YOU WANNA ALSO SHARE. YES SO
AS SOME SMALL OPERATOR MYSELF
THAT HAS TRANSITIONED OVER FROM
LEGACY TO THE LEGAL MARKET- HE-
YOU KNOW- IT IT'S VERY
DIFFICULT- GOING TO THE
LICENSING PROCESS IT'S NOT
NECESSARILY THE EASIEST THING TO
DO SO. LOWERING THE BARRIERS OF
ENTRY TO ACTUALLY BECOMING
LICENSED- AS IS ONE WAY TO GET.
MORE ILLICIT OPERATORS I
TRANSITIONED OVER AS WELL AS-
ECHOING GREG MINOR- LOWERING THE
TAXES CURRENTLY THEY HAVE NO
INCENTIVE TO PAY LOWER TAXES OR
PAY ANY TAXES SO LOWERING THE
TAXES- GETTING SOME OF THE
CONSUMERS TO PURCHASE ON THE
LEGAL MARKET AND THEN. HOPEFULLY
ARE GETTING THE- UNREGULATED
OPERATORS TO TRANSITION OVER- IT
IS THE TOP BEHIND THAT AND THEN
ALSO- ECHOING MR KEYS. ARE
EXPANDING RETAIL ACCESS- AS-
KAREN WATSON MENTIONED EARLIER
ONLY 20% OF CALIFORNIA'S MARKET
IS CURRENTLY ALLOWING COMMERCIAL
CANNABIS ACTIVITY. WHERE BIG
STATE- I BELIEVE 76% OF THE
STATE VOTED FOR LEGALIZATION SO
THAT NEEDS TO BE REFLECTED IN
THE RETAIL MARKET AND IT'S JUST
NOT. THANK YOU. THANK YOU SO MR
THE DRESS YOU HAVE YOUR HAND UP
WITH THAT FROM BEFORE OR DID YOU
WANT TO ADD TO THIS. NO I WOULD
ADD JUST IN TERMS OF THE IF I
MAY IN TERMS OF ENFORCEMENT I
THINK THERE ARE NUMBER OF THINGS
THAT COULD BE DONE ON THE TAX
FRONT- TO PROVIDE STRONGER
ENFORCEMENT- IN BRINGING THE
CANNABIS TAX- RULES MORE IN LINE
FOR INSTANCE WITH THE SALES AND
USE TAX RULES THE STATE HAS
WHICH- YOU KNOW MILLION
TAXPAYERS ALREADY- ARE SUBJECT
TO. MAKE MAKE IT EASIER TO
ENFORCE- TAX LIABILITIES I WOULD
JUST POINT OUT WHEN WE'RE
EXHAUSTED HAS TO TAX RATES. BUT
THE- THAT TOBACCO TAXES IN THE
STATE OF CALIFORNIA CIGARETTE
TAXES NOW TWO DOLLARS NINETY
SEVEN CENTS PER PACK IT'S FOR
OTHER TOBACCO PRODUCTS IS HIGHER
THAN SIXTY PERCENT- SO WE DO
HAVE A LOT OF EXPERIENCE IN THE
STATE IN. AND TAXES THAT ARE
RELATIVELY HIGH WHERE WE DON'T
SEE THE SAME LEVEL OF NON
COMPLIANCE AND I DO THINK THAT
THE HIGHER THE TAX ONLY. THE
MORE IMPORTANT IT IS THAT WE
HAVE A TAX SYSTEM THAT MAKES
SENSE AND THAT IS EASILY
ADMINISTERED AND THAT HAS-
SUFFICIENT ENFORCEMENT AND I
THINK HERE- YOU KNOW- ALL OF
THOSE THINGS COULD BE ADDED ON
TO MAKE A TAX SYSTEM THAT WORKS
BETTER FOR INDUSTRY PARTICIPANTS
AFTER THE STATE OF CALIFORNIA.
TO DIVERSIFY MY LAST LAST
QUESTION THE MANAGER. WITH THE
MURDER OF. ENFORCEMENT EMPLOYEE
. BECAUSE FOR THOSE WHO ARE NOT
ABIDING BY THE RULES. BY THE LOS
. THIS SEEMS TO BE SUCH AN
ENORMOUS. UNDERTAKE WHAT DO YOU
THINK COULD BE DONE TO ENSURE
THE ENFORCEMENT. THE COLLECTION
OF THE TAXES ON THOSE WHO ARE
AVOIDING IT AND TO PUNISH THOSE
. PENALIZE THEM IN SOME WAYS FOR
THEIR AVOIDING. WELL I THAT'S A
GREAT QUESTION AND I THINK
THEY'RE TWO AVENUES HERE ONE
THERE THERE IS A CRIMINAL AVENUE
CRIMINAL AVENUE OVER WHICH I
DON'T HAVE ANY SAY IN THAT
INVOLVES GETTING LOCAL
PROSECUTORS AND LOCAL LAW
ENFORCEMENT INTERESTED IN- IN
COMBATING THIS PROBLEM AND IN
VARIOUS PORTIONS THE STATE THERE
IT DOESN'T SEEM TO BE THAT
INTEREST ON THE SEVERAL FRONT AS
A TAX MATTER. I DO THINK WE'RE
ALREADY DOING A LOT WE HAVE
TEAMS AROUND THE STATE- WE CAN
SEIZE PEOPLE'S PROPERTIES- PUT-
SEIZE THEIR ASSETS- LEVY THEM-
TAKE WHATEVER ASSETS WE CAN FIND
TO SATISFY LAWFUL TAX
OBLIGATIONS I DO THINK THAT THE
WAY THE SYSTEM IS CURRENTLY SET
UP- THERE ARE A FEW PROBLEMS
THAT- MAKE IT MORE DIFFICULT FOR
US TO DO THAT THAN WE DO IN
OTHER TAX AREAS AND I WOULD
SUGGEST THAT. IF WE BRING
CANNABIS TAXES IN LINE WITH OUR
OTHER TAX PROGRAMS LIKE SALES
AND USE TAX THAT WE COULD DO AN
EVEN BETTER JOB AT THAT IT IS AN
ENORMOUS PROBLEM- AND IT WILL
TAKE TIME BUT THE CIVIL PATH I
BELIEVE- IS GOING TO BE A LOT
MORE EFFECTIVE AND MORE
EFFICIENT THAN TRYING TO PURSUE
A CRIMINAL PAST. WHEN THE
PROBLEM IS SO WIDESPREAD ROOM
LAST WON AND FOR THE MOMENT
MADAM CHAIR THE COMMITTEE GROSS
THE YOUR SUGGESTION FOR SOME OF
THE THINGS THAT YOU'VE DONE DO
YOU HAVE ANY DATA. ON ON HOW
MANY INDIVIDUALS YOU HAVE
SANCTIONED OR CONTACTED IN SOME
WAY OR ANOTHER- DIVIDE I'D BE
HAPPY TO PROVIDE YOU WITH-
INFORMATION ABOUT- HOW MANY ARE
. BUSINESSES WE- INSP HOW MAY
PRODUCTS SEIZURES WE'VE DONE HOW
MUCH CASH HE SEES WE REGULARLY
HAVE TEAMS AROUND THE STATE. AT
THE RETAIL LEVEL THAT WILL GO IN
AND SEIZE ON TAX PRODUCT THAT
WILL- YOU KNOW WE'LL GO IN WITH
LOCKSMITHS AND- TAKE THE CASH
OUT OF THE SPACE- IN ORDER TO
SATISFY TAX OBLIGATIONS. IT'S
NOT NEARLY ENOUGH IT IS THE
SCOPE OF THE PROBLEM IS VERY
LARGE AND THAT'S WHY I'M
SUGGESTING THAT I DO THINK THERE
IS SOME SLIGHT MODIFICATIONS IN
THE TAX CODE THAT WOULD. HELP US
TO DO AN EVEN BETTER JOB AT THAT
BUT- BUT THE OTHER ISSUE IS THAT
WE REALLY NEED A STRONGER
PARTNERSHIP WITH LAW ENFORCEMENT
AROUND THE STATE BECAUSE- YOU
KNOW I HAVE AUDITORS- WHO AND
IT'S- SENDING- AUDITORS INTO A-
ILLEGAL CANNABIS OPERATION. WE
YOU KNOW WE NEED HELP- AND WE
NEED LAW ENFORCEMENT TO GO IN
WITH US AND THAT'S PROVEN TO BE
A CHALLENGE. I APPRECIATE YOUR
ANSWERS BUT I CAN GET YOU THE
DATA I'D BE HAPPY TO PROVIDE THE
COMMITTEE WITH. THE DATA IN
TERMS OF WHAT WE HAVE DONE IF
YOU WOULD BE SO KIND I WOULD
APPRECIATE IT. I JUST HAVE TO
OBSERVE NOT WITH A SMILE BUT
WITH A HUGE ROUND. WE'RE IN THE
PROCESS IN THE STATE OF PRETTY
MUCH DIMINISHING DESTROYING AND
PUTTING THE HANDCUFFS ON LAW
ENFORCEMENT. WE'RE PAYING THE
CONSEQUENCES. BUT I SEE NO
ABILITY OF LOCAL LAW ENFORCEMENT
NOW ANY LAWN FOR. THEY ARE
LOCAL. TO BE ABLE TO DO ANYMORE
AND THE CIRCUMSTANCES WERE
SUFFERING TODAY THAT IS JUST THE
SENATORIAL OBSERVATION MANAGER
THANK YOU. THANK YOU MR VICE
CHAIR AND MISTER MAJORIS AT THE
EXAMPLE THAT YOU GAVE ABOUT
TOBACCO EVEN THOUGH THE- TAXES
ARE HIGH ON THAT- THE
DIFFERENCES THAT I DON'T THINK
THERE'S A MARKET PLACE FOR
ILLEGAL TOBACCO THAT'S BEING
SOLD SO THE REAL ISSUE IS JUST
THE COMPETITIVE MARKETPLACE WITH
REGARDS TO WHAT STATE IS
OFFERING THE SAME PRODUCT FOR-
WITH A LESS WITH THE- LOWER TAX.
SO I DO THINK THERE'S- A
DIFFERENCE BUT- MISS ELLIOTT YOU
HAD YOUR HAND UP DID YOU WANT TO
ADDRESS SOMETHING THAT SENATOR
NIELSEN HAD ASKED. I DIDN'T WANT
TO ADDRESS THE QUESTION IF I MAY
UM TWO FIRSTS AT ECHO THE
SENTIMENTS OF THE DIRECTOR
MADURO'S THAT THERE IS AMPLE
OPPORTUNITY TO STRENGTHEN. TAX
POLICY ADD TO ENCOURAGE
ACCOUNTABILITY- AND TO HOLD
THOSE INDIVIDUALS OPERATING
ILLEGALLY I COUNTABLE TO OUR TAX
POLICIES- AND- ALSO THE
DEPARTMENT IS WORKING. AT WITH
OUR SWORN OFFICERS IN
COLLABORATION WITH A NUMBER OF
LAW ENFORCEMENT AGENCIES ACROSS
THE STATE AS WELL AS STATE. LAW
ENFORCEMENT AT TO TAKE ACTION
AGAINST ILLEGAL MARKET HOWEVER I
THINK IT GOES. OUT IT MUST BE
SAID THAT HISTORICALLY WE HAVE
SEEN THAT ENFORCEMENT DOES NOT
GET RID OF THIS MARKET. ARE
THERE HAVE TO BE A NUMBER OF
DIFFERENT PATHWAYS- THAT WE TAKE
TO ADDRESS THE ILLEGAL MARKET.
AND IT REALLY A HUGE. DANCE
WILL- WELL WILL MAKE A HUGE DENT
IN THE ILLEGAL MARKET IS LOCAL
PARTICIPATION AND TO THE POINT
OF OPENING UP LOCAL ACCESS TO
CONSUMERS CURRENTLY 62% OF LOCAL
GOVERNMENTS BANNED ALL FORMS OF
CANNABIS RETAIL. THAT
INCENTIVIZES. AND PERPETUATES AN
ILLEGAL MARKET BECAUSE
CALIFORNIA HAS EXISTING
CONSUMERS ARE THAT WILL PURCHASE
CANNABIS WHETHER OR NOT IT'S
FROM LEGAL OR ILLEGAL SOURCES. I
SAW THAT IS A REALLY IMPORTANT-
VERY OF ALL THAT I DON'T WANT TO
HAVE LOST IN THE DISCUSSION- AND
ALSO I WILL SAY I KNOW THAT- THE
LEGISLATURE IS LOOKING AT A
BUNCH OF OTHER CREATIVE
SOLUTIONS IN THIS SPACE TO
CREATE STABILITY IN THE MARKET.
I'M THOSE ARE DISCUSSIONS THAT
WE ARE ENCOURAGED TO SEE ARC ARE
OCCURRING I MEAN LOOK FORWARD TO
SEEING HOW THOSE INVOLVED IN A
SESSION. OKAY GREAT THANKS YEAH
I JUST WANT TO SAY IF. YOU HAVE
A TRUSTED SOURCE AND YOU CAN BUY
CANNABIS FOR. FIVE DOLLARS OR
TWENTY FIVE DOLLARS. AND THEN
THERE'S A LEGAL RETAILERS
SELLING THE SAME THING FOR
SEVENTY FIVE YOU'RE NOT GOING TO
PAY SEVENTY FIVE DOLLARS. I
MEAN. AS ANYWAY NO MORE
COMMENTARY FOR ME SENATOR ROB I
SEE YOUR- MICROPHONE IS ON.
THANK YOU MADAM CHAIR SINCE OF
THE SUBJECTS TAX REFORM I WAS
JUST TRYING TO REFRESH MY
RECOLLECTION TO THE EXTENT I
EVER HAD ANY. ON HOW WE GOT TO
WHERE WE ARE WITH RESPECT TO
THE- TAX SYSTEM FOR CANNABIS.
SOMEONE MENTIONED ALCOHOL PREP
SOMEONE COULD HIGHLIGHT FOR ME
THE DIFFERENCES IF THERE ARE ANY
BETWEEN. CANNABIS AND ALCOHOL
WITH RESPECT TO THE TAX SCHEME
IN THE COLLECTION SCHEME. EL
AL'S OFFICE I SEE YOUR HAND IS
THAT. THANK YOU THANK YOU MADAM
CHAIR YES SO- STILL THERE ARE
SOME SIGNIFICANT DIFFERENCES-
BETWEEN CANNABIS TAXATION AND
ALCOHOL TAXATION IN CALIFORNIA
AND JUST- SORT OF AT A HIGH
LEVEL THERE ARE SIX THREE
RELEVANT- BUT LEAST THREE
RELEVANT LEVELS OF GOVERNMENT
THAT ENGAGING. IN TAXATION
THERE'S FEDERAL STATE AND LOCAL-
SO FOR ALCOHOL FEDERAL TAXES ARE
VERY SUBSTANTIAL PARTICULARLY
FOR DISTILLED SPIRITS- OF COURSE
THERE IS NO FEDERAL EXCISE TAX
ON CANNABIS BECAUSE OF FEDERAL
PROHIBITION WHICH COULD BE
THOUGHT OF AS AS AN EXTREME TAX
OF SORTS. ON THERE ARE STATE
EXCISE TAXES ON BOTH CANNABIS
AND ALCOHOL- AND THEN AT THE
LOCAL LEVEL THERE'S TO MY
KNOWLEDGE NO SUCH THING AS A
LOCAL ALCOHOL TAX AT LEAST IN
CALIFORNIA BUT THERE ARE AS
NOTED EARLIER SOME VERY
SUBSTANTIAL LOCAL TAXES ON
CANNABIS TO THE TUNE OF. AS WE
ESTIMATED IN TWENTY NINETEEN
APPROXIMATELY THE EQUIVALENT OF
14% ON AVERAGE OF THE OF THE
RETAIL PRICE. SO THEN AT THE
STATE LEVEL- EARLIER I JUST TO
RECAP THE EARLIER DESCRIPTION
OF- CANNABIS TAXES STATEWIDE
CANNABIS TAXES THERE'S THE PER
POUND OR PER OUNCE CULTIVATION
TAXES WELL AS THE A RETAIL
EXCISE TAX WHICH IS A PERCENTAGE
OF- IN MOST CASES THE WHOLESALE
PRICE IN A FACT BUT IN SOME
CASES OF THE- RETAIL PRICE. THEN
ON THE ALCOHOL TAX SIDE OF THE
STATE TAXES OR ESSENTIALLY ON
THE- ON THE DISTRIBUTION OF THE
BASED. ON DOLLARS- VOLUME OF THE
BEVERAGE- THE FEDERAL EXCISE
TAXES ON ALCOHOL ARE A BIT
DIFFERENT. AND A BIT MORE
COMPLEX AND IN SOME CASES YOU
DEPEND ON ON THE ALCOHOL.
CONTENT SPECIFICALLY- IN OUR
TWENTY NINETEEN- REPORT- THAT I
REFERENCED EARLIER WE ALSO HAD A
COUPLE ACCOMPANYING LITTLE BLOG
POSTS ONE OF WHICH ATTEMPTED A
COMPARISON BETWEEN CANNABIS
TAXES IN ALCOHOL TAXES-
COMBINING EXCISE TAXES AT ALL
FOR ALL THREE LAYERS OF
GOVERNMENT COMBINED FEDERAL
STATE AND LOCAL. OF COURSE THIS
OMITS OTHER OTHER FACTORS-
PARTICULARLY RELATED TO THE
FEDERAL PROHIBITION OF CANNABIS
BY COMPARING JUST THE EXCISE
TAXES- WHAT WE ESTIMATED WAS
THAT- IN CALIFORNIA THE
COMBINED- TAX TAXES ON- CANNABIS
ARE. SHOWROOM NINE DESERVE
COMBINED EXCISE TAX BURDEN IS
YOUNG CANNABIS IS SORT OF
SIMILAR TO- DISTILLED SPIRITS-
BUT CERTAINLY CONSIDERABLY
HIGHER THAN WHINER BEER. SO IN
LOOKING AT YOUR FLOW CHART ON
PAGE FOUR WHICH IS PAGE FOUR OF
OUR HAND- YOU HAD A SLIDE- WITH
RESPECT TO CANNABIS WE HAVE THE
RETAIL EXCISE TAX WHICH IN AND
OF ITSELF IS SORT OF CONFUSING
TO ME BECAUSE AT ONE POINT IT'S
DESCRIBED AS AN AD VALOREM TAX
ON WHOLESALE SALES IN SOMEWHERE
ELSE AND START IT'S DESCRIBED AS
A FIFTEEN PERCENT. TAX ON THE
RETAIL PRICE. OF THE PROPOSITION
TALKS ABOUT A TAX ON RETAIL
GROSS RECEIPTS. YES THERE WAS
SOME DISCUSSION ABOUT
DISTRIBUTORS HAVING TO COLLECT.
HAVING TO ESTIMATE AND THEN PAY
CAN YOU SORT OF. REVIEW THAT
WITH ME YES PLEASE AND I BELIEVE
DIRECTOR INTERESTS WILL HAVE A
FOLLOW UP AFTER AFTER I RESPOND-
SO V. MEASURE PROP SIXTY FOUR
ESTABLISHED A- THAT- THE 15%
EXCISE TAX ON RETAIL SALES AS
WELL AS THE CULTIVATION TAX I
AND THAT SORT OF AS FAR AS IT
WENT IT WAS THESE TAXES AS
ESTABLISHED IN PROP SIXTY FOUR
WERE NOT. RADICALLY DIFFERENT
AND INFORM FROM- FOR EXAMPLE YOU
KNOW SOME OTHER TAXES THAT THE
STATE ADMINISTERS ALTHOUGH AS
SOME PANELISTS OF NOTI HAVING A
CULTIVATION TAX PER SE ON AN
AGRICULTURAL PRODUCT IS NOVEL AT. THE STATE LEVEL I'M- BUT NINE
FOUR OF TWENTY SEVENTEEN- IS
WHAT INSTITUTED THIS- COLLECTION
AND REMITTANCE AT THE
DISTRIBUTOR LEVEL AND SO THAT'S
SORT OF WHAT WHAT ALTERNATELY
GAVE US THE SYSTEM- WHERE
DISTRIBUTED THE FINAL
DISTRIBUTOR OF THE CANNABIS
PRODUCT IS RESPONSIBLE FOR
REMITTING THE TAX TO THE STATE-
BUT TO SORT OF WORK THAT INTO A
SYSTEM THAT HAD. A CULTIVATION
TAX IN A RETAIL EXCISE TAX IT
NECESSITATED SOME WORKAROUNDS
AND ONE OF THEM WAS TO FIGURE
OUT A WAY TO COLLECT THE TAX-
THE RETAIL EXCISE TAX BEFORE THE
RETAIL SALE EVER BERZINS THAT'S
SORT OF REFLECTED ON THE FLOW
CHART IN THE HANDOUT AND I
SUPPOSE. DIRECTOR MENTOR US I
DON'T KNOW IF WE WANT TO GO TO
HAMMER WELL I JUST AS WHY WAS
WHY NOT HAVE THERE IF IT'S IF
IT'S A TAX BASED ON RETAIL
SALES. WHY NOT HAVE THE TAX
COLLECTED AT THE POINT OF SALE.
AND. THEN REMANDED EITHER
DIRECTLY. TO CD T. OR IF THERE'S
- BUSINESS REASON TO HAVE IT
ROUTED THROUGH THE DISTRIBUTOR
HAVEN'T ROUTED THROUGH THE
DISTRIBUTOR. SO NOBODY'S
FLOATING ANY MONEY. WE KNOW
EXACTLY WHAT THE TAX IS SUPPOSED
TO BE. AND ISN'T THAT A SIMPLER
PROCESS. YES OKAY. WELL I GUESS
WE'LL HAVE TO REVISIT THE- SO
THERE IS NO PARTICULAR LEGAL
REASON WHY IT WAS STRUCTURED THE
WAY IT WAS STRUCTURED IT'S JUST
BECAUSE THAT'S HOW WE MAKE THE
SAUSAGE HERE. WELL I AM SURE I
THINK THERE WAS AT LEAST ONE
OTHER PANELIST WITH THE
DIFFERENT- PERSPECTIVE BUT-
CERTAINLY WE WERE IN OUR TWENTY
NINETEEN REPORT WE DISCUSSED
SOME OF THE PROS AND CONS OF AND
STRUCTURING IT IN DIFFERENT WAYS
BUT ULTIMATELY- BONTA D. AS SORT
OF SIMPLER PERCHES LIKE WHAT
YOU'RE DISCUSSING ULTIMATELY.
MEETS AND I'M NOT SUGGESTING
THAT THE DISTRIBUTORS BE TAKEN
OUT OF THE PROCESS I'M JUST
TRYING TO FIGURE OUT A BETTER
WAY TO CALCULATE THE TAXES
ULTIMATELY REMITTED. THERE MUST
BE SOME GOING BACK AND FORTH IF
SOMEBODY'S ESTIMATING AND THEN
THERE'S AN ACTUAL RETAIL SALE AT
SOME POINT YOU MUST HAVE TO TRUE
UP THE PROCESS. IF YOU'RE DOING
IT RIGHT. WELL I THINK ANYWAY
SAID MINIMUM PROBABLY SHOULD GET
OTHER PANELISTS BUT JUST. THE
WAY THEY LAW THE STATUTE IS
CURRENTLY STRUCTURED IT'S NOT A
REQUIREMENT TO BE TRUE IT UP
BECAUSE IT'S ESSENTIALLY ONLY
TRYING TO APPROXIMATE THE 15% IN
AND IN AGGREGATE. NOT WITH
RESPECT TO EVERY INDIVIDUAL
TRANSACTION OKAY AND THEN ONE
FOR ONE FINAL QUESTION I GUESS.
ON THE CULTIVATION TAX IF I'M
LOOKING AT YOUR FLOW CHART. DOES
THE DOES THE TAX TO THE PROCEEDS
ACTUALLY FLOW TO THE FIRST
DISTRIBUTOR AND THEN TO THE
MANUFACTURER AND DOWN TO THE
LAST DISTRIBUTOR AND FINALLY TO.
CD TFA. OR IS THAT JUST OF- FOR
PURPOSES BILLS. AND IF THE
ANSWER IS YES. THEN WHY ISN'T
THE TAX PAYMENT FLOWING DIRECTLY
TO THE FIRST DISTRIBUTOR FOR
USING THE DISTRIBUTOR MODEL. OR
TWO CD TFA SO- AGAIN BE
INTERESTED IN HEARING FROM THE-
OTHER OTHER PANELISTS BUT ALL
ALL JUST SORT OF LAID OFF WITH
THAT BECAUSE I'M EXPLAINING ARE
FLOW CHARTS SO MY AGE IT'S NOT
INTENDED TO BE A METAPHOR- YOU
WE REALLY ARE UNDERSTANDING IS
THAT THERE IS THERE IS AT LEAST
IN PRINCIPLE ARE PAYMENTS
FLOWING IN THAT FASHION OF
COURSE AND THERE'S A LOT OF US
WRITING DIVERSITY IN WHAT
CANNABIS AT TAX SUPER SORRY WHAT
CANNABIS SUPPLY CHAINS LOOK LIKE
SO THAT'S- AYE IN THAT SENSE IT
IS MERELY AN EXAMPLE ALTHOUGH WE
TRY TO CHOOSE A VERY. COMMON
WHAT WE UNDERSTAND IS A VERY
COMMON STRUCTURE- OUR
UNDERSTANDING IS THE STATUTE
REQUIRES THE FINAL DISTRIBUTION
TO BE THAT THE POINT OF TAX
REMAINS EVEN FOR THE CANNABIS
CULTIVATION TAX BUT I'M SURE
OTHER FOLKS COULD AT AND THAT'S
WHY WE ILLUSTRATED THAT WAY BUT
OTHER FOLKS GOOD AT WHAT JUMP
AND I'LL LEAVE YOU ALONE IN THE
SECOND FOR. ALL BUT IT'S THE
STATURE NOT THE PROPOSITION THAT
REQUIRES THAT SO WE'VE YES
THAT'S MY UNDERSTAND THAT MY
UNDERSTANDING IS THIS THIS THIS
WHOLE ALL OF THAT- ARISES FROM
SB NINETY FOUR AS I UNDERSTAND
AND I'LL THROW OUT ONE FINAL.
QUESTION AND I'M- PERFECTLY.
WILLING TO. MOVE AND LEAVE YOU
WILL I BY YOU ENOUGH BUT- DO WE-
EXPERIENCE ANY TAX WRECKAGE AS
OPPOSED AS A RESULT OF THIS FLOW
CHART WHERE THE MONEY FLOWS
AROUND BEFORE IT ACTUALLY GETS
TO THE- CD TFA. I THINK THAT'S
ONE WHERE I WILL INDEED HAVE TO
DEFER TO THE OTHER- PANELIST WE
DON'T HAVE ANY HARD DATA ON THAT
WE- IT SEEMS IN PRINCIPLE LIKE A
SNIFF AGAIN- COMPLIANCE PROBLEM
BUT OR I. I SHOULD SAY A
SIGNIFICANT COMPLIANCE CHALLENGE
THAT YOU KNOW THE EXTENT TO
WHICH IT CAUSES AN ULTIMATE
PROBLEM IS NOT SOMETHING WE HAVE
HARD DATA ON A NON. SO DEFERRED
ANY OTHER PANELISTS ON THAT ONE
WELL IF THIS WERE THE PLUMBING
IN MY HOUSE I HAVE A LEAK
SOMEWHERE. AS USUAL YOU'VE BEEN
GREAT SIR- I DON'T KNOW IF CD
TFA WANTS TO WELL ACTUALLY WE
HAVE PEOPLE WHO'VE. HAD THEIR
HAND UP TO HELP ADDRESS SOME OF
THE QUESTION THANK YOU KNOW IF
YOU'RE ON FINISHED YEAH NO NO SO
MISS CENTER AND THEN MISS WHAT'S
AND. AND THEN WILL END WITH
DIRECTOR MADURO'S. I YES THANK
YOU I JUST WANTED TO CLARIFY-
THERE'S A SENSUALLY A HIT IN
FEDERAL TAX- WHICH IS THE TWO
EIGHTY E. R. AND IRS TAX CODE
WHICH- PROHIBITS- US AS A
CANNABIS- BUSINESS OPERATORS
FROM- WRITING OR DEDUCTING-
TYPICAL BUSINESS EXPENSES
ASSOCIATED WITH THE SALE OF
CANNABIS SO ESSENTIALLY- A HIT
IN FEDERAL TAX THAT WE PAY.
THANK YOU LESS THAN ONE CENT
YEAH THANK YOU- I DO APPRECIATE
SENATOR ROSS I'VE QUESTIONS OF
THE RABBIT HOLE WE'RE GOING DOWN
CANNABIS TAXES ARE ABSOLUTELY
CONFUSING BUT I THINK IT'S
IMPORTANT THAT WE RUN DOWN THESE
CHANNELS TO GET TO A POINT OF
CLARITY I'M REGARDING THE
ALIGNMENT OF CANNABIS TAXES AND
THE AND THE ALCOHOL TRADE- YOU
KNOW WHEREVER THE COMMITTEE
DECIDES TO GO OR WHEREVER
ALTERNATELY ME AND I IF WE
CHOOSE TO KEEP THE COLLECTION IN
REMISSION. IN THE DISTRIBUTION
CHANNEL THEN YOU KNOW I WOULD
REALLY ENCOURAGE THE COMMITTEE'S
CONSIDERATION OF ADDITIONAL
PROTECTIONS THAT ARE AFFORDED TO
THE ALCOHOL TRADE THAT WE ARE
NOT AFFORDED FOR INSTANCE A
CREDIT LAW TO PROTECT THE FLOW
OF GOODS TO RETAILERS WHO ARE
YOU KNOW CHORE OR EXCUSE ME TO
RESTRICT THE FLOW OF GOODS TO
RETAILERS WHO ARE IN THE FALL
RIGHT IF YOU DON'T PAY YOUR
BILLS IN IN THE ALCOHOL MARKET
YOU DON'T GET. ALCOHOL THE
SUSPENSION OF THE OF LIFE. IF IS
A SIX. TO FALL OUT FROM RITA BY
. THAT DISTRIBUTORS CAN CALL
UPON WHEN THE RETAILER DOES THE
FALL LIKE AT THE END YOU KNOW AT
THE VERY LEAST- YOU KNOW
CANNABIS DISTRIBUTORS SHOULDN'T
SHOULD NOT BE OBLIGED. TO REMIT
ANOTHER OPERATORS TAX UNTIL THAT
TAXES BEING COLLECTED. AND SO
I'LL JUST AND THERE BUT IF WE'RE
LOOKING FOR SEEKING TO KEEP THIS
IN THE JUSTARSENAL I REALLY WHAT
EMPLOYERS ARE- I BELIEVE AYE
KRISTIN HOW TO UNLOCK AT
TEAMSTERS. ALSO SUPPORTED SOME
SOME WAYS TO PROTECT
DISTRIBUTORS- AND ENSURE THAT
THAT WE CAN REMIT THESE. TIMELY
WITHOUT PUTTING A DOLLARS THANK
YOU THE SENATORS INTEREST WELL
IT SOUNDS LIKE WITH RESPECT TO
ALCOHOL THE COMPUTATION OF THE
TAXES CERTAIN AT THE TIME. THAT
THE PRODUCT FLOWS FROM THE
DISTRIBUTOR TO THE RETAILER. BUT
NOT SO WITH RESPECT TO. CANNABIS
IN CAREER. THIS WOULD SEND.
THAT'S WHAT I MEAN THAT'S MY
UNDERSTANDING WE IN THE IN IN
THE IN THE ALCOHOL INDUSTRY MY
UNDERSTANDING IS THAT YOU KNOW
EXACTLY WHAT YOU'RE BURDEN IS
WHEN IT'S PRODUCED IN OUR
ITUATION THE BIRD AND AS AS
THANKS BYE WE OFTEN DON'T WE
DON'T GET WE DON'T COLLECT FROM
THE RETAILER WE'RE WE'RE HAVING
TO PAY. CITIES THE FAA BEFORE
WE'VE ACTUALLY COLLECTS ABOUT
REVENUE FROM THE RETAILERS
BEFORE THAT PRODUCT HAS LEFT THE
SHELLS AND THE REASON I MEAN I
THINK WHERE WHERE WHAT WE'RE
STRUGGLING WITH HERE IS THAT
TAXES IN CALLAHAN COUNTY IN
CALIFORNIA CANNABIS ARE DO YOU.
LEGALLY WHEN THE PRODUCT ENTERS
. WHAT WE CALL THE LEGAL
SUPPLIES CHANNEL AND THAT IS THE
POINT AT WHICH- THE FINAL
DISTRIBUTOR CAN DOCKS. QAQC SO.
ALL OF THAT THE PAYMENT IS DUE
AND SORT OF THAT THAT THE STATE
DEEMS THAT PRODUCT HAVING BEEN
SOLD. OUT THE POINT OF
DISTRIBUTION BEFORE IT ACTUALLY
GETS SOLD FROM THE STOP. WELL IT
SOUNDS LIKE I MEAN IT SOUNDS
LIKE WHEN THE RETAILER. REQUIRES
THE PRODUCT FROM THE DISTRIBUTOR
AT THE WHOLESALE PRICE THE
WHOLESALE PRICE ALSO INCLUDES.
AN EXCESS TASTE BETTER ACCESS TO
TAX COMPONENT THAT'S BASED ON
VOLUME APPARENTLY THAT IS THEN
REMITTED TO THE STATE. THE
RETAILER TAKES THE PRODUCT AND
THEN SELLS IT OFF THE SHELF AND
WHATEVER ELSE IS DUE IT'S DO
WHICH IS NOT. THE CASE WITH
CANNABIS WHERE WE'RE MAKING AN
ESTIMATE OF WHAT THE RETAIL
SALES PRICE WOULD BE. THE
WHOLESALER THE DISTRIBUTOR PAYS
THE ESTIMATE AND THEN I GUESS
THE RETAILERS IN THE PROCESS AND
YOU DEPEND ON COLLECTING THAT
MONEY FROM THE RETAILER AT SOME
POINT ONCE THE PRODUCT MOVES OFF
THE RETAILER'S SHELF IS IN MY IT
IS MY UNDERSTANDING OF THE WAY
THIS PROCESS WORKS CORRECT
YOU'RE ON YOUR ON THE RIGHT PATH
AND THAT THAT COMPLAINT I THINK
THE DIFFICULT PART. IS THAT IS
THAT OFTEN TIMES THE PRODUCT
THAT LEAVING THAT'S LEAVING THE
SHOP DOESN'T SELL AT THAT 80%
MARK OUT. WOW OKAY WELL YES- SO
I GUESS I GIVE UP. NO NO YOU
CAN'T GIVE UP BECAUSE THERE'S
NOT A LOT IS GOING TO ADD AND
THEN I'M SAVING YOU FOR LAST
DIRECTOR MADURO'S BECAUSE IT
SOUNDS LIKE THERE'S A HAPPENED
SADIO COMING RIGHT TO YOU. I
FORGOT TO. THANK YOU SO MUCH I
JUST WANTED TO ADDRESS-
SOMEONE'S CENTER ROCKS CONCERNS
THE TEAMSTERS IT'S REALLY NO
SECRET THAT YOU KNOW WE ARE
DEFINITELY THE FOLKS IN THE ROOM
THAT ARE ASKING THAT THE TAXES-
ST AT THE DISTRIBUTOR THERE'S A
NUMBER OF REASONS. WHY WE FEEL
THAT WAY- REALLY WHEN WE STARTED
DOWN THIS PATH. WE ARE TAKING A
- UNDERGROUND ILLICIT INDUSTRY
AND PULLING IT UP INTO. A
TRANSPARENT MARKETPLACE AND THE
DISTRIBUTORS ROLE- AND THE
SIXERS IN ALCOHOL AND- YOU KNOW
IT IT WAS. DO YOU THAT THIS
WOULD SERVICE AT A CHECK AND
BALANCE- I AGREE WITH KAREN
WHOLEHEARTEDLY THAT I THINK THAT
THERE NEEDS TO BE MORE TEETH TO
PROTECT YOUR DISTRIBUTORS- AND
THEN IF THEY HAVE THOSE
PROTECTIONS IN PLACE THEN THERE
ARE. YOU KNOW THERE. WOULDN'T
REALLY BE- YOU AT LEAST HAVE I
KNOW. TO DIRTY WERE BACK YOU
KNOW GETTING WORD KIND OF
LEANING TOWARDS A SPACE WHERE
YOU KNOW. WE HAVE TO BE ABLE TO-
REWARD THE GOOD ACTORS AND- I
TAKE OUT THE FOLKS WHO. WE'RE
NOT REMITTING THE TAX SO. IF WE
HAVE DISTRIBUTORS WHO ARE HAVING
ISSUES ACTUALLY COLLECTING AND
RECEIVING THE TAX. BUT MY NEXT
QUESTION IS HOW ARE WE THEN
GOING TO TRUST THOSE SAME
VENDORS THE SAME RETAILERS.
REMITTING THE TAX THE STATE. TO
DO THIS AT THE DISTRIBUTOR LEVEL
THEN WHY WOULDN'T. HE EXPECTS
THE EXCISE TAX BE BASED ON. THE
WAIT FOR EXAMPLE OF THE CANNABIS
IF THAT'S THE PROPER WAY TO DO
IT IF WE'RE DOING ALCOHOL BY BY
VOLUME. AND THEN HAVE THE
RETAILER PAY THAT- TO THE
DISTRIBUTOR HAVE THAT TAX
REMITTED TO. CD TFA AND THE
RETAILER TAKE THE PRODUCT AND
MOVE IT OFF THE RETAILER'S SHELF
WERE NOT. WOULD THAT BE A MORE
CERTAIN WAY TO DO THIS AND THEN
. I'M SORRY AND THEN THE
RETAILERS ABLE TO SELL THE
PRODUCT WHATEVER THE RETAILERS
ABLE TO SELL THE PRODUCT IF
IT'S- THE IN OTHER WORDS TO TRY
TO MAKE IT A LITTLE BIT. A
CLOSER TO THE ALCOHOL MODEL IF
WE'RE GOING TO USE THE ALCOHOL
MODEL OF. DISTRIBUTION AS THE AS
THE WAY TO GO FOR CANNABIS. I
THINK YOU'RE PROBABLY REFERRING
TO POTENCY BASE MAY BECAUSE WE
DO HAVE TO WAIT BASS ALTHOUGH I
WILL NOT CLAIM AT ALL TO BE A
TAX EXPERT I WILL LEAVE THAT TO-
DIRECTOR MADURO'S- BUT- I JUST
WANTED TO. ADDRESS SOME OF YOUR
CONCERNS AND ALSO- ECHO WHAT
WHAT KAREN WAS SAYING FROM CUBA
THAT- BEFORE WE DISMANTLE. OF
THE DISTRIBUTION PIECE WE THINK
THAT THERE'S OTHER THINGS THAT
THAT COULD BE ADDED BEFORE WE DO
THAT AND ONE OF THAT WOULD BE
ONE OF THOSE WOULD BE
PROTECTIONS FOR YOUR
DISTRIBUTORS. AND THEN WHY NOT
HAVE THE CULTIVATION TAX PAID.
PERHAPS THROUGH THE FIRST
DISTRIBUTOR THAT'S FINE BUT THEN
DIRECTLY TO CD TFA. IF IT'S A
CULTIVATION TAX I DON'T KNOW
WHAT. IT'D VALUE. WHAT VALUE
WOULD BE ADDED TO THE PRODUCT
MOVING THROUGH MANUFACTURING AND
THE OTHER DISTRIBUTORS IF IT'S A
CULTIVATION TAX AS OPPOSED TO
SOMETHING ELSE. THOSE ARE GOOD
QUESTIONS I WISH I HAD A GREAT
ANSWER FOR YOU. WELL I DON'T
KNOW EITHER BUT I DO APPRECIATE
YOU PUTTING UP WITH ME THANK YOU
MADAM CHAIR THANK YOU SENATOR
RUSSELL- MISS WATSON'S HAND JUST
CAME OUT BUT- ERECTOR MADURO'S
DO YOU. HAVE I YOUR HAND HAS
BEEN UP FOR A MINUTE AND IT
SOUNDS LIKE. YOU KNOW THE RENT
IS TOO HIGH AND THE CANNABIS
TAXES ARE TOO HIGH. I DON'T SET
THE RATES BUT- I WOULD JUST SAY
THAT SENATE ROTH HAS-
IDENTIFIED. VERY QUICKLY AND-
SOME OF THE KEY PROBLEMS THAT
EXIST IN THE COMPLEXITY OF THE
CURRENT TAX SCHEME AND IF I
COULD JUST TAKE A MINUTE ON THE
ON THE CULTIVATION TAX PIECE IF
THE CULTIVATION TAX WORD REMAIN.
HAVING IT PAID BY THE FIRST
DISTRIBUTOR FOR THE FOR THE OF
THE FIRST PURCHASER ABSOLUTELY
MAKES SENSE THAT THE ADDED
COMPLEXITY OF TRYING TO FIGURE
OUT- YOU KNOW BECAUSE IT'S NOT
JUST- CANNABIS FLOWER THAT IS
BOUGHT AND THEN DIVVIED UP AND
SOLD IT IS- YOU KNOW. MADE INTO
EXTRACT WHICH IS THEN PASSED
ALONG TO SOMEBODY ELSE WHO MAKES
IT INTO IT. CANDY OR CHOCOLATE-
OR INTO SOME SORT OF VAPE POD
IN. AND TO TRY TO TRACK THAT IS
JUST IS VERY DIFFICULT. I'M AND
I DO THINK IT MAKES IT MUCH
EASIER FOR THERE TO BE TAX
LEAKAGE- ALTHOUGH I WOULD SAY
THAT YOU KNOW BY AND LARGE WE
SEE THE- MOST PEOPLE IN THE
LEGAL MARKET ARE TRYING THEIR
BEST TO COMPLY BUT IT IS VERY
COMPLICATED FOR THEM AND FOR US
TO ADMINISTER. AND THEN- AT AT
THE SALES POINT. THE YOU KNOW
THE PROP 6415% RATE WAS
SOMETHING THAT I THINK PEOPLE
CAN UNDERSTAND IT WOULD BE LIKE
A 15% EXTRA SALES TAX. I THINK
THE CURRENT SYSTEM WITH THE
AVERAGE STATEWIDE MARKUP- IS
CONFUSING FOR INDUSTRY
PARTICIPANTS FOR CUSTOMERS AND
IT MAKES IT- MORE DIFFICULT TO-
ADMINISTER WHICH IS NOT TO SAY
THAT THERE'S NOT A VERY
REASONABLE- ROLE FOR.
DISTRIBUTORS TO PLAY IN THE
SYSTEM- CERTAINLY THERE'S
TESTING THERE YOU KNOW COULD BE
SOME OF THESE TAX FUNCTIONS AS
WELL BUT- I THINK IF. BEFORE WE
THROW UP OUR HANDS AND SAY THAT
YOU HAVE. THE TAX SYSTEM. CAN'T
WORK I WOULD JUST HOPE THAT- WE
WILL TAKE A LOOK AT AND TAKING
SOME VERY COMMONSENSE
SIMPLIFICATION MEASURES ON THE
SENATE ROTH. AND MANY OTHERS
HAVE IDENTIFIED. THANK YOU
SENATE ARRESTED YOU HAVE ANY
OTHER ALTHOUGH I'M FINISHED
THANK YOU OKAY. SO CENTER TO
COVER YOUR OWN DO YOU HAVE ANY
QUESTIONS. LET ME JUST SAY THAT-
I DID NOT TAKE. TAX IN LAW
SCHOOL FOR A REASON AND I HAD A
WHOLE BUNCH OF QUESTIONS THAT
WOULD HAVE MADE A MESS OF THIS
AND SENATOR UP WENT RIGHT TO THE
TO THE ISSUES THAT I WAS
CONCERNED ABOUT PART OF THIS IS
THAT PROPOSITION WHICH REQUIRES
US TO GO BACK OUT TO THE VOTERS
IN ORDER TO CHANGE IT. PART OF
THIS IS ARE DOING AND THEN
UNDERSTANDING WHERE WE TAX IT
AND HOW IT'S DIFFERENT FROM
OTHER TAXES SO THAT WE CAN TRY
TO MAKE IT SIMPLER I'M I'M ALL
FOR DOING THAT SO I REALLY
APPRECIATE THE QUESTIONS THAT
WERE ASKED- AND I DON'T HAVE IT
IT CLEARED IN MY MIND. WHAT THE
WORK THAT WE HAVE TO DO I REALLY
APPRECIATE THAT PARTICIPANTS
THAT ARE HERE BECAUSE YOUR
TESTIMONY IS. REALLY HELP KIND
OF GET THROUGH- REALLY. I THINK.
OUTLINED THE SAUSAGE MAKING
RIGHT THAT THIS WAS A DIFFICULT
TASK TO GET TO LEGALIZATION AND
CONVINCING THE PUBLIC THAT WE
HAD- SOME REAL IMPORTANT.
OPPORTUNITIES THAT WE NEEDED TO
EXPLOIT THAT IS WAS WAS I THINK
PRINCIPLE AND SO NOW WE'VE GOT A
WITH SOME EXPERIENCE WE GOT TO
FIGURE OUT HOW TO MAKE- THE- THE
LEGAL MARKET. VERY COMPETITIVE
SO THAT WE CAN GET RID OF THE
ILLEGAL MARKET- AND THAT'S
HOPEFULLY WE CAN GET THERE SO I
REALLY THANK YOU FOR YOUR
PARTICIPATION TODAY. THANK YOU
FOR THAT SERVER CABALLERO YEAH I
JUST WANT TO ADD BEFORE WE GO TO
PUBLIC COMMENT THAT. THE THE
GRAPHIC. PROVIDED BY L. A. O. I
MEAN THIS IS UNWIELDY- AND
THAT'S CERTAINLY NOT WHAT YOU'RE
pPEOPLE JUST HAVE THEIR HAIR GET
BLOWN BACK BY LOOKING AT THE
COMPLEXITY OF THIS PARTICULAR
SYSTEM I WANT TO ECHO WHAT
SENATOR CABALLERO SAID. YOU KNOW
PRICING HAS TO BE COMPETITIVE IN
ORDER TO DRY UP THE ILLEGAL
MARKET- AND INSTEAD IT SEEMS
LIKE WE'VE BEEN PENALIZING THOSE
WHO'VE BEEN COURAGEOUS ENOUGH TO
ENTER INTO THE LEGAL MARKET WHO
ARE NOT CONNECTED REALLY TO
CORPORATE CAPITAL THAT CAN
AFFORD TO SORT OF FLOAT THEM AND
COVER THE COST OF ALL THE
OBSTACLES IN THE CHALLENGES AND
THE DELAYS- THAT ARE FACED IN
THIS FIELD. AND THEN IT ALSO
SEEMSLIKE WE KIND OF STRUCTURE
TO TAX FORMULA BASED ON THE
ASSUMPTION THAT THIS NEW LEGAL
MARKET WAS GOING TO BE A CASH
COW. AND HOW DO WE THEN SORT OF
REVAMP IT IN A WAY THAT LOWERS
OUR EXPECTATIONS SO THAT WE CAN.
YOU KNOW PROMOTE AND ENCOURAGE
GREATER GAME YOU KNOW IN THE
MARKET PLACE- I HAD A QUESTION.
BASED ON. THE GRAPHIC IN OUR
HAND OUT ON PAGE NINE ABOUT THE
CANNABIS TAXES ALLOCATION THREE
SO IF THE CANNABIS TAX REVENUE
DECLINES HOW WOULD THE PROGRAMS
SPECIFICALLY THOSE THAT ARE IN
THE ALLOCATION THREE HOW WOULD
THEY BE IMPACTED IF AT ALL. A
SERVICE- SENATOR COME WATER I
CAN- I CAN SCAN YOU GIVE YOU A
ROUGH SENSE- SAID KIRSTEN WITH
THE L. S. STARRETT FORGET TO
REINTRODUCE MYSELF- SO. THE WAY
WE MY UNDERSTANDING OF THE OF
THE WAY THAT- THE REVENUE IS
ALLOCATED CURRENTLY IS THAT
THERE IS A- LAG SPECIFICALLY FOR
ALLOCATION THREE WHERE. I'M SO
TYPICALLY FOR MOST FUNDS IN THE
STATE BUDGET I YOU TRY TO ALIGN
THE SPENDING AND REVENUE-
SIMULTANEOUSLY IN THE SAME YEAR.
BUDGET HERE FOR EXAMPLE ARE
PREFERRED ALLOCATIONS THREE- IN
CANNABIS TAXES IT'S A BIT
DIFFERENT IT'S A YEAR DELAY I'M
AWARE THERE'S A BALANCE FROM THE
PRIOR TO OF TAX REVENUES FROM
THE PRIOR YEAR THAT THEN GETS
CARRIED OVER YOU SEE HOW MUCH
YOU HAVE. AND YOU DIVIDE THAT UP
AMONG THE AB- DENTIST HERE
THREE- ALLOCATIONS- AND SO FOR A
- SEARCH YOUR QUESTION IF THE
LEGISLATURE WERE TO TAKE AN
ACTION THAT AFFECTED REVENUE
STARTING JULY FIRST TWENTY
TWENTY TWO. THAT WOULD AFFECT-
AS WE UNDERSTAND IT THAT WOULD
AFFECT ALLOCATIONS RESTARTING.
I'M NOT IN. THE TRUCK TWENTY TWO
TWENTY THREE FISCAL YEAR NOT IN
THE BUDGET YEAR BUT RATHER IN
BUDGET YOUR PLUS ONE. I TWENTY
THREE TWENTY FOUR SO THAT'S SORT
OF ONE PIECE ON THE NEXT STEP
THEN IS- LET'S SAY THERE'S SOME
NET CHANGE IN REVENUE THAT
RESULTED FROM IT I TAX CHANGE
THAT. DATA WENT INTO EFFECT- THE
HIGHEST LEVEL OF THE WAY THAT
WOULD BE SLATE IS IT WOULD
PRIMARY. PRIMARILY THINK
POSSIBLY EXCLUSIVELY ON THE AT
BAT BY MY I CAN'T THINK OF AN
EXAMPLE WHERE IT WOULDN'T AFFECT
ANYTHING BUT ALLOCATIONS THREE
BECAUSE THE WAY IT WORKS IS.
ALLOCATION ONE SERVER GETS ITS
ACT AND THEN ALLOCATION TO WHICH
IS- AMOUNTS THAT ARE FIXED IN
STATUTE I THINK FINANCIAL FOLLOW
UP ON THIS. OTHER DAY MOUNTS AN
ALLOCATION TO OUR FIXED INSTEAD
SHE DEMANDS AN ALLOCATION ONE
NOT FIXED IN STATUTE BUT- WE'RE
NOT DIRECTLY DEPENDENT ON THE
AMOUNT OF TAX REVENUE. IS THEN
ALLOCATION THREE THERE'S A THREE
SERVE THREE ACCOUNTS WITH AND
THAT. THE USE CAN GETS SIXTY
PERCENT- ENVIRONMENTAL COUNT
GETS TWENTY AND THE A LAW
ENFORCEMENT ACCOUNT GETS TWENTY
AND THEIR VARIOUS ALLOCATIONS
WITHIN THOSE- THE LARGEST ONE
OVERALL BEING- CHILD CARE SLOTS
WITHIN THE USE ACCOUNT- SO I
THINK. I PERHAPS MIGHT BE A GOOD
TIME FOR ME TO TURN IT OVER TO
OUR DEPARTMENT OF FINANCE IF.
YOU'D LIKE ADDITIONAL. THAT'LL
WORK BECAUSE MS HARBISON OUR
HAND AT. AND THERE CAN BE A
HARVEST DEPARTMENT OF MY JUST
WANTED TO SAY THAT FIRST PADDOCK
. OF THAT THREE PAR IS OUT A
YEAR AND A REAR SO. AFTER ONE
OUR COVERED WHATEVER SLOW IS-
AND THE NEXT YEAR. AND IF IT'S A
SMALLER TOTAL POT OF MONEY WOULD
STILL THE SAME. SPLIT SO STILL
BE. THE SIXTY PER FOR YOU YOU
TWENTY FOR. AND 20% FOR LOCAL
GOVERNMENTS. ARE FORTUNATE. OKAY
GREAT THANK YOU AND THEN MY- THE
SECOND QUESTION WAS I THINK FOR-
DCC AND THAT'S OUR PROVISIONAL
LICENSES ON TRACK TO TRANSITION
TO ANNUAL LICENSES. THANK YOU
FOR THAT QUESTION ADEQUATELY AT
DIRECTOR OF THE DEPARTMENT
CANNABIS CONTROL I THERE ARE A
SIGNIFICANT A SIGNIFICANT PART
OF OUR LICENSEE POPULATION
CURRENTLY HOLDS FROM NATIONAL
LICENSES THAT IS SOMETHING THAT
LICENSE WILL BE PHASED OUT I'M
OVER THE NEXT YEAR AND A HALF. I
AS A RESULT OF SOME LEGISLATIVE
ACTIVITY LAST SUMMER- WE WORKED
EXPEDITIOUSLY TO GET ALMOST ONE
HUNDRED MILLION DOLLARS IN
GRANTS OUT TO LOCAL GOVERNMENTS
TO AID IN THE TRANSITION. OF
PROVISIONAL LICENSEES TO ANNUAL
LICENSES AYE SO WE ANTICIPATE
THAT WE WILL START TO SEE THOSE
LICENSEES TRANSITION I IN THE
COMING YEAR I HAD TO THREE YEARS
I AND WE WILL MOST DEFINITELY
NOTIFY THE LEGISLATURE IF WE
FEEL THAT THERE WILL BE HICK UPS
IN THAT PROCESS TO OUR REGULAR
REPORTING REQUIREMENTS AS WELL
AS ANY PROACTIVE. OUT REPORTING
WE NEED. TO DO NOT TO FIGHT
BACK. GREAT THANK YOU AND I JUST
WANT TO ADD AS YOU ARE ARE
LOOKING AT THAT IN COMPILING
THAT DATA IT IS REALLY IMPORTANT
THAT YOU'RE CONSIDERING THE
SOCIAL EQUITY COMPONENT THERE
WAS AN ARTICLE IN THE LA TIMES
MAYBE A WEEK OR SO AGO THAT
TALKED ABOUT THE CHALLENGES.
THAT MANY FOLKS IN MY DISTRICT
FACE TRYING TO YOU KNOW
TRANSITION FROM PROVISIONAL TO
ANNUAL THE COST OF THE LADIES
YOU KNOW FOLKS HAVING TO CLOSE
DOWN BUSINESSES BECAUSE OF IT.
AND SO WE'RE GOING BACKWARDS- ED
IN TERMS OF THE INTENTION BEHIND
IT- AND SO YOU WOULD BE GOOD
JUST END UP SEEING OR CONFIRMING
WHO'S ACTUALLY GETTING THEM. AND
WHO ISN'T. THANK YOU AND I'LL
JUST ADD LA WAS A RECIPIENT OF
APPROXIMATELY TWENTY TWO MILLION
DOLLARS OUT OF THAT GRANT FINDS
OUT TO SUPPORT THEIR PROGRAM
IMPLEMENTATION AS WELL AS THEIR
LICENSEES IN PARTICULAR THEIR
LICENSE YOU SEE WHAT COMPLIANCE
AYE SO WE ARE FOCUSING A LOT OF
ENERGY ON TRYING TO SEE SUCCESS
NOW AS FAR CARE GREAT THANK YOU
SO MISTER SENATOR ROSS HAS A HAS
A QUESTION. JUST A QUICK ONE
MANAGER I WAS JUST TRYING TO
REFRESH MY RECOLLECTION ONE
OTHER POINT BECAUSE IT'S BEEN A
LONG TIME FOR ME BUT ON THESE
ALLOCATIONS ONE TWO AND THREE IN
THE SUB CATEGORIES DO WE- I
REALIZE THAT BUT THE BASIC
ALLOCATIONS I BELIEVE HER EITHER
SEVEN THE PROPOSITION OR BY
STATUTE DO WE READJUST THE SUB
CATEGORIES. EACH YEAR IN THE
BUDGET. OR ARE THOSE SOME. IN
CONCRETE HARBISON CAN YOU ANSWER
THAT. OR THANKS FOR HAVING ME
AGAIN KIMBERLY HARVEST
DEPARTMENT OF FINANCE ALLOCATION
ONE VERY SOMEWHAT FROM. YEAR TO
YEAR- LIKE FOR EXAMPLE THERE IS
A PARTNER CAN CONTROL PROPOSAL
THIS YEAR DEPART DO YOU HAVE.
THERE IS PROPOSALS DOUBLE THEIR
FUNCTIONS THAT ARE REQUIRED BY
THE PROPOSITION BY STATUTE
OCCASION TO IS PRETTY SET IN
STONE AND THEN WHATEVER'S LEFT
IS WHAT MATTERS MOST RELEGATION
THREE THE FOLLOWING YEAR. I SEE
SO THE ONLY FOR THE CATACLYSM
CATEGORIES ARE. ARE SET IN
STATUTE AND THAT THE ONLY THING
THAT VARIES IS THE AMOUNT.
CORRECT OKAY THANK YOU SENATOR
ROTH IF I MAY I THINK JUST TO
ADDRESS ONE ASPECT THE OTHER
ASPECT OF YOUR QUESTION YOU
ASKED IF THESE ARE SET IN THE
BUDGET AND- JUST TO CLARIFY
THESE ARE ALL CONTINUOUSLY
PERFECT. CONTINUOUSLY
APPROPRIATE. THAT'S RIGHT. SO
FOR EXAMPLE STATE AND LOCAL
GOVERNMENT LAW ENFORCEMENT
ACCOUNT. C. H. P. FOR IMPAIRED
DRIVING ACTIVITIES AND I. T.
ADMIN STAFF THAT'S A PERMANENT
SUB CATEGORY. MS HARBISON IS
SHAKING HER HEAD YES. YES
REMEMBER WE YEARS AGO WE HAD
CONVERSATION ABOUT THAT BUT IT
IS WHAT IT IS THANK YOU. DUN DUN
DUN OKAY I SEE NO OTHER A LIGHTS
ON. AND I MISS I HAD A BLACK
YOUR HAND HAS BEEN UP BUT I'M
ASSUMING YOU JUST DIDN'T LOWER
IT. OKAY GREAT SO NOW WE WILL
MOVE ON TO ANYONE WANTING TO
PROVIDE PUBLIC COMMENT REGARDING
ITEMS ON THE AGENDA AS A
REMINDER TODAY'S PARTICIPANT
NUMBER IS EIGHT SEVEN SEVEN. TWO
TWO SIX EIGHT ONE SIX THREE AND
THE ACCESS CODE IS SEVEN SIX TWO
TWO. FOUR SIX TWO. DUE TO
RESTRAINTS REGARDING THE LENGTH
OF HEARINGS TECHNOLOGY. AND THEN
CLEANING PROTOCOLS COMMITTEE
CHAIRS MAY INSTITUTE TIME LIMITS
ON TESTIMONY. TODAY I'M GOING TO
ASK THAT EACH MEMBER OF THE
PUBLIC PROVIDING COMMENT KEEP
THEIR REMARKS WITHIN ONE MINUTE.
NOW WE ARE GOING TO BEGIN WITH
ANY WITNESSES THAT ARE HERE IN
THE HEARING ROOM AND I SEE A
COUPLE AND I HAVE TO SAY IT IS.
IT WOULD IT WOULD BE CANNABIS
THAT WOULD BRING PEOPLE OUT INTO
THE CAPITAL TO ACTUALLY PROVIDE
TESTIMONY. SO SIR PLEASE GO
AHEAD. THERE ARE MEMBERS OF THIS
REFRESHING TO BE HERE THANK YOU-
RANDY MARTIN ON BEHALF OF THE
PARENT COMPANY WHICH IS BETTER
KNOWN AROUND THE CAPITOL AS
KHALIFA THE LARGEST VERTICALLY
INTEGRATED COMPANY IN THE STATE
WITH OPERATIONS FROM CHULA VISTA
TO EUREKA IT'S GOING TO HIT ON
THREE POINTS VERY QUICKLY ONE
HAS NOT BEEN TALKED ABOUT MUCH
BUT THERE HAVE BEEN SOME OF THE
SUGGESTIONS BY SOME. QUARTERS
ABOUT- INSURING SOME REVENUE
NEUTRALITY AND WHATEVER THIS TAX
REFORM LOOKS LIKE WE'LL BE
CAREFUL WE NEED TO BE CAREFUL IN
HOW WE DO THAT IS REVENUE
NEUTRALITY AS IT'S BEEN
PRESENTED AS TALKED ABOUT
RAISING THE EXCISE TAX TO MAKE
UP FOR LOST AND CULTIVATION. ALL
THAT DOES UNFORTUNATELY IS
DISCOURAGE PEOPLE WHO WANT TO
PURCHASE FROM ILLEGAL. FROM
LEGAL ENTITIES FROM COMING TO
LEGAL ENTITIES BECAUSE THE TAXES
EVEN GOING TO BE HIGHER. THAN
WHAT THEY'RE PAYING NOW. WE JUST
NEED TO BE CAREFUL ABOUT HOW WE
DEAL WITH THE ISSUE OF REVENUE
NEUTRALITY- RELATIVE TO THE
ISSUE OF- ALLOCATION THREE TO
USE SERVICES- THERE HAVE BEEN
SOME FOLKS WHO ARE. ARGUING
AGAINST ANY KIND OF TAX REFORM.
BECAUSE THEY'RE FEARFUL THAT
THEY'RE GOING TO LOSE MONEY ON
THAT'S GOING TO THESE PROGRAMS.
I MEAN WE APPRECIATE RESPECT
THAT OBVIOUSLY WE WERE ALL PART
OF PROP SIXTY FOUR BUT PUTTING
IT TOGETHER. AND THEN THAT WAS
IN PROP SIXTY FOUR SO WE'RE ALL
COMMITTED. TO THOSE FUNDS GOING
TO YOU SERVICES. THE PROBLEM IS
OVER THE LAST TWO QUARTERS WE'VE
SEEN A STEADY REDUCTION. IN TAX
REVENUE- TO THE STATE. AS THAT
REDUCES IT MEANS THAT WE'RE
GOING TO HAVE LESS MONEY
AVAILABLE ANYHOW YEAR. FOR
ALLOCATION FREE. SO THEY HAVE TO
BE CAREFUL IN STANDING IN THE
WAY OF TAX REFORM. BECAUSE IF WE
DON'T GET TAX REFORM ALL WE'RE
GOING TO SEE A REDUCTION RATHER
THAN AN INCREASE IN TAXES. ON
BASED ON THE FACT THAT WE HAVE A
MORE ROBUST LEGAL- MARKET PLACE-
I APPRECIATE THAT YOU'RE
BRINGING UP THE ISSUE OF
TRANSITION. FROM PROVISIONAL TO
ANIMALS- APPRECIATE ON DIRECTOR
ELLIOTT'S COMMENTS AND HOPE THAT
THEY ARE ON TRACK TO DO THAT I
HAVE TO TELL YOU. THE INDUSTRY
IS PROFOUNDLY ANXIOUS. ABOUT
WHETHER WE'RE GOING TO
TRANSITION IN TIME. FOR THOSE
WHO ARE OPERATING LEGALLY BUT
ARE STILL PROVISIONAL. OF BEING
ALLOWED TO TRANSITION TO ANNUAL
IN TIME THAT THEY'RE NOT PUT OUT
OF BUSINESS. CAN YOU LOSS OF TAX
REVENUE LOSS OF JOBS. AND OTHER
THINGS. AND THEN FINALLY IN
ANSWER TO SENATOR NELSON'S
QUESTION EARLIER ABOUT HOW WE
DEAL WITH- THE ILLEGAL MARKET. I
WANT TO POINT OUT ONE ISSUE THAT
HAS COME UP RECENTLY- THERE WAS
A- FABULOUS VICE DOT COM-
ARTICLE IN JANUARY RELATIVE TO.
ILLEGAL CULTIVATION OPERATIONS
OUT IN THE FAR STRETCHES. OF
SAMBAR DINO COUNTY. IN WHICH
THERE WERE PEOPLE WHO ARE
OPERATING THOSE ILLEGAL GROWS.
I'M SAYING THAT THE REASON THEY
DID SO. IS BECAUSE IT WAS A COST
OF DO IT AT ANY THE PENALTIES
ORG TEAM WORKS. DOING BUSINESS.
A SLAP ON THE WRIST- AND SO THEY
WOULD JUST TAKE THEIR- PICTURE
OF PENALTY. AND COME BACK AND.
CONTINUE TO GROW BECAUSE THE
REVENUE THAT THEY RISK. WITH SO
MUCH. WE NEED TO AT PENALTY THAT
REALLY DO GO AFTER. PEOPLE WHO
ARE FLAUNTING THE LAW IN A VERY
VERY BIG WAY. THANK YOU VERY
MUCH. WE'RE ONE MORE WITNESS.
GOOD AFTERNOON MEMBERS OF THE
COMMITTEE MS. OBRECHT GLAD
VULTEE HERE ON- WITH APEX GROUP
ON BEHALF CARE RELIEF AND
PERFECT UNION. WE LIKE TO SHOW
OUR GRATITUDE FOR THE WORK OF
DIRECTOR ELLIOTT OF THE DC AND
THEIR STAFF FOR THE COMMITMENT
IN PROMOTING TRANSPARENCY AND
APPRECIATE THE DIRECTOR'S
COMMENTS OUTLINING THE CURRENT
ISSUES WITH INDUSTRY. REITERATE
OBVIOUSLY THE US TAXES ARE TOO
HIGH FOR THE CANNABIS INDUSTRY
AND IT'S A PIVOTAL MOMENT THAT
WE ELIMINATE THE CULTIVATION TAX
AND CUT IS TIGHT EXCISE TAX. WE
ALSO SUPPORT ADDITIONAL- SUPPORT
FOR EQUITY APPLICANTS AND I'D
LIKE TO NOTE THAT AS THE- MY
COLLEAGUE MENTIONED EARLIER IS
THAT PROVISIONAL LICENSING IS
GOING TO BE A BIG ISSUE.
STARTING ON JUNE THIRTIETH OF
THIS YEAR THEY WILL NO LONGER BE
ISSUING PROVISIONAL LICENSES AND
WILL TAKE A VERY LONG TIME FOR
NEW APPLICANTS TO. JOIN THE
CALIFORNIA LEGAL CANNABIS MARKET
SO IT'S GONNA MAKE IT MORE
DIFFICULT AFTER JUNE THIRTIETH
SO I JUST WOULD LIKE THE- AT
THIS POINT THANK YOU SO MUCH.
THANK YOU. I DO HAVE A WE HAVE
ONE MORE COMING. HELLO EVERYONE
FOR HAVING US I'M ARE YOU OUR
CHANNEL A POLICY ADVOCATE WITH
YOU FORWARD I'M HERE TODAY
REPRESENTING A HUNDRED AND FIFTY
TWO CHILD CARE AND YOUTH
ORGANIZATIONS AND PHYSICIANS
GROUPS WHO HAVE SIGNED A LETTER
TO GOVERNOR AND LEGISLATIVE
LEADERS EXPRESSING OUR CONCERN
ABOUT THE IMPACT OF THE
PROPOSALS TO REDUCE CANNABIS
RATES. ON LOW INCOME CHILDREN
AND CHILDREN OF COLOR CURRENTLY
CANNABIS TAX REVENUES ARE A
MAJOR FUNDING SOURCE FOR CHILD
CARE AND YOUTH PREVENTION ACROSS
THE STATE AS WELL AS LEGAL
SERVICES AND JOB TRAINING FOR
PEOPLE WHO HAVE BEEN
INCARCERATED. WE ASK THAT ANY
CHANGES TO THE CANNABIS TAXES
NOT RESULT IN CUTS TO CHILD CARE
AND YOU SERVICES CHILDREN LIVING
IN POVERTY SHOULD NOT HAVE TO
PAY THE PRICE FOR BUILDING A
LARGER CANNABIS INDUSTRY IN OUR
STATE. AND IN ADDITION WE ALSO
DO HAVE COPIES OF THE LETTER
THAT WAS SENT TO THE GOVERNOR
THAT WE WANT TO OFFER TO THE
SENATE IF POSSIBLE. THANK YOU
WILL ACCEPT THAT. ANY OTHER
MEMBERS OF THE PUBLIC HERE
PRESENT WISHES TO TESTIFY.
SEEING NONE OF THEM MODERATE
WOULD YOU PLEASE PROMPT
INDIVIDUALS WHO WANT TO PROVIDE
PUBLIC COMMENT AND THEN WE WILL
COMMENCE THAT SECTION. MAKE YOUR
ASSESSMENT CLEARLY LET US KNOW
THE TOTAL NUMBER OF PEOPLE
WAITING ON QUEUE. JOHN ON THE
PHONE MIND IF YOU'D LIKE TO
PROVIDE PUBLIC COMMENTS PLEASE
PRESS ONE ZERO AT THIS TIME.
AGAIN ONE ZERO FOR PUBLIC
COMMENT. AT THE TIME WE HAVE
ABOUT FIVE IN OUR QUEUE. PROCEED
WITH OUR FIRST WITNESS. OFFERS
GO TO LINE THIRTY SEVEN PLEASE
GO AHEAD. YEAH THANK YOU MR
CHAIRMAN AND COMMITTEE MEMBERS
ARE WE REALLY APPRECIATE ALL
DIALOGUE IS VERY IMPORTANT ISSUE
TODAY MY NAME IS AMY JENKINS I'M
HERE ON BEHALF OF THE CALIFORNIA
CANNABIS INDUSTRY ASSOCIATION
OUR ORGANIZATION WAS FOUNDED ON
THE PRINCIPLE OF STRENGTH IN
NUMBERS AND WE CURRENTLY HAVE
FOUR HUNDRED CALIFORNIANS
THERE'S NOTHING PREVENTING SIX
HUNDRED GRAND. AND MORE THAN
FIFTEEN THOUSAND EMPLOYEES I
WANT YOU I GOT- IN UNDERSCORE
THE COMMENTS MADE BY ENDED WITH
THEM TODAY MISTER MARTIN AND
OTHER INDUSTRY REPRESENTATIVES.
LIKE THAT THE A HIGH TACKLE AND
A LACK OF ACCESS TO MEET
HEALTHCARE FIELD IN OUR BACK A
LOOK AT MARKET AND TOWARD THE
ABILITY OF THE INDUSTRY TO
ACHIEVE LONG TERM STABILITY OF
POLLUTION TO THESE ISSUES ON THE
POSSIBILITY OF SAVING THE
INDUSTRIALIZED AND IMMEDIATELY
AND DRAFTING THE NEW MARK
BARRIER THE LEGAL MARKET
CONTINUES TO. I REDUCING PARKS A
DAMP CALLED THAT PUT LEGACY OP
AND TALK DIVERSE AND EXPANDING
FREE LEGAL. THAT END EPA SUPPORT
AND PERMANENT SUSPENSION OF THE
CALL. TAX REDUCTION OF THE EX
FIVE FOX. IT SHOULD BE MARKET
DRIVEN PACE STREAMLINED THE
PARKLAND PROP. AND SUPPORT ACT
TO RETAILERS REPORT YOUR BEARD
BURDENED WITH EXCESS ACCOUNT AND
SUPPLEMENTAL AND FOR SO EQUITY.
AGAIN WE APPLY IN A PRE TH
TODAY AND BE HELPFUL CAN THEY
CAN IN THE COMING A VERY TO THE
VERY URGENT FOR. LEGAL INDUSTRY
THANK YOU. CANNABIS WHOLESALE
PLATFORM I THIRTY NEED HIGHER
STATE CALIFORNIA THANK YOU SO
MUCH FOR THE OPPORTUNITY AND THE
DIALOGUE DAY REGARDING DATE
CRITICAL ISSUES AROUND
CALIFORNIA'S LEGAL MARKET- AND
DEMONSTRATING TODAY'S
PRESENTATION IN THE CANNABIS
AFTER AFTER IT AND WE NOT
WORKING. ON THE HIGHER RATE THAN
THE EXCISE TAX BINDER
COMPLICATED CULTIVATION ACT AS
BETTER OFF NOT EVEN DEMONSTRATED
EARLIER I HAVE COFFEE IN PRICE
THE- OF A PRODUCT I ROCKY
DRIVING CONSUMERS AWAY AND
CREATE DIFFICULT OPERATIONAL
COSTS- I ALSO WANT TO UNDERSCORE
THAT RATE THEY'RE NOT ONLY THE
ONLY ISSUE THAT WE'RE DEALING
WITH IT IS ALSO THE COLLECTION
ISSUES. ADMITTED WHEN AND SO
BEAUTIFULLY ARTICULATED EARLIER
CURRENT LAW REQUIRES YOUR
READERS THREE MIDEAST PASSES-
ARE A JUDITH PTSA EVEN IF THEY
ARE NOT EIGHT EIGHT MILLION
INTERVIEWS ARE FACED WITH THE
DIFFICULT AND- OF PAYING TAXES
THAT HAVE NOT BEEN GIVEN TO THEM
YET BY RETAILERS INCLUDING.
FINES PENALTIES AND OTHER
ENFORCEMENT ACTIONS I'M FOR SOME
OF US LIKE NOW TO BE MILLIONS OF
DOLLARS IN RETURN ACRE IN
RESERVE FUND BEING. A PAPER AND
PACKAGING FOR OTHER DISTRIBUTORS
THAT CAN ACTUALLY LEAD TO
BANKRUPTCY THIRTY STREAMLINED
CRITICAL BADLY CONSIDER I TAX
REDUCTION WE ARE ALSO
CONSIDERING TAX REFORM
PARTICULARLY LACKING PROTECTED
TRIBUTARIES HOLDING ON HARDWOOD
ALLEGATIONS THAT HAVE NOT YET
BEEN PAID TO THEM BY RETAILERS
OR OTHERWISE ENSURING BURIED I
NEED. A PATH TO THAT NOT YET
EIGHT I'M OF COURSE HAPPENED
THEY'RE JUST ONE OF MANY LEGAL
AND REGULATORY ISSUES CURRENTLY
FACED BY OUR LEGAL CANNABIS
SYSTEM CAN YOU REALLY LOOK
FORWARD TO CONTINUE DIALOGUE
WITH YOUR COMMITTEE THE
ADMINISTRATION THE LEGISLATURE
THE GREAT OKSANA PANELING ON THE
PHONE TODAY I FEEL ENSURE
WORKING A CRIME IN THE
PROPERTIES BEFORE. THANKS SO
MUCH. YOUR NEXT WITNESS. SLATED
TO KEEP KIND OF IT TAX REVENUE
HOLE WITHOUT ANY INTERRUPTION IN
REVENUE TO MAINTAIN CRITICALLY
IMPORTANT PROGRAMS AND SERVICES.
FOR CHILDREN AND YOUTH AS WELL
AS ENFORCEMENT. THE PROMISE TO
THE VOTERS WITH THE SIGNIFICANT
TAX REVENUES WOULD SUPPORT A
SERIES OF THE FIND ACTIVITIES.
AND IS PROMISE CANNOT BE
BREACHED AND AS MENTIONED
EARLIER P. H. I. HAS JOINED WITH
A OVER A HUNDRED AND FIFTY TWO
OTHER ORGANIZATIONS. TO OPPOSE
THE BLANKET CUT. IN A TAX
REVENUE SHOULD NOT BE
SUBSTITUTED BY GENERAL FUND
REVENUES WHICH IS NEEDED OTHER
OGEN IMPORTANT PURPOSES. IN
ADDITION PUBLIC HEALTH INSTITUTE
STRONGLY SUPPORT THE ALEJO'S
RECOMMENDATION PROPOSED DEBATE
TAX. SIMILAR TO WHAT. HAS BEEN
IMPLEMENTED IN YOUR STATE. BY
TAX CUTS. THE LOCK LARGE
CORPORATE. MORE THAN X. LIFE. OR
SMALL BAR CAL. POLICIES MAKING.
TO SUPPORT EQUITY LIKE. BUT NOT
REVIEW OVERALL TAXES ON MANY
LARGE PROFIT AFTER IN THE MARKET
SPACE THANK YOU MUCH. THANK YOU
. NEXT WHAT. NICK WILL BE
THIRTY. HI THERE I'M THANK YOU
FOR THE OPPORTUNITY TO SHARE. MY
NAME IS MARNIE BURKE- AND I
WANTED TO SAY ABOUT THEIR QUEUE
IN AND PROGRAM OF. EVENTS THE
REPEAL THE CAR. TAX FIFTY
DISCRIMINATION. SMALL GROWER
ALREADY PAID. SMALL LATEST GROW
SHOULD NOT HAVETO CULTIVATE
TAXES. SMALL FOR ARE GOING OF
EVERY DAY I'M NOT NOT OK. THE
TASK AS A RATE. HAS THE
GOVERNMENT. MAKING ONE HUNDRED
PER. THAT'S NOT OKAY. I CAN
AGREE WITH SMALL GROWER WHO
SPOKE EARLIER TIME TRINITY AND
WHAT HE SAID. AND YEAH THANK YOU
FOR THIS OPPORTUNITY TO SPEAK.
THANK YOU DO WE HAVE MORE
IMPROVE OPERATOR. YES SIR WE
HAVE THREE MORTAR Q. WE'LL GO TO
NUMBER THIRTY FIVE. HELLO THANK
YOU FOR THIS TIME MY NAME IS
GERRY KYLO- EIGHTEEN YEARS THAT
CANNABIS RETAILER IN THE STATE
OF CALIFORNIA PRESIDENT OF THE
UNITED CAMAS BUSINESS
ASSOCIATION WE REPRESENT
MULTIPLE SUPPLY CHAIN LICENSE
HOLDERS THROUGHOUT THE ENTIRE
STATE AND WE HAVE ALSO- OFFERED
A LEGISLATIVE BILL THIS YEAR ON
TAX REDUCTION AND TAX REFORM.
I'M I DO WANT TO COMMENT MOSTLY
ON THE EXCISE TAX COLLECTION-
I'VE HEARD SOME MAYBE MORE-
IDEAS ABOUT HOW WE CAN HOLD
PEOPLE MORE ACCOUNTABLE I THINK
THE PART WHEN IT COMES TO EXCISE
TAX COLLECTION. NO ONE SHOULD BE
LOANING THE STATE OF CALIFORNIA
TAX DOLLARS BEFORE THEY ARE
COLLECTED IN THE CURRENT FORM OF
TAX COLLECTIONS BUT THE BURDEN
UPON EVERY PERSON UPON THE
SUPPLY CHAIN TO PRE PAY TAXES.
BEFORE THE TAXES ARE COLLECTED
AS A RETAILER I THINK SIXTY
THREE THOUSAND EVERY DOLLAR I
COLLECT. THE TAXES. 35% OF EVERY
DOLLAR GOES TOWARDS COST OF
GOODS ELEVEN TONS OF EVERY
DOLLAR GOES TOWARDS LABOR
LEADING THE OF THE RETAILER ONE
CENTS ON EVERY DOLLAR. TO BE
ABLE TO MANAGE MY BUSINESS AND
MAYBE HAVE A PROFIT MARGIN.
THERE'S A PROBLEM THERE WE ARE
NOT INCENTIVIZING PEOPLE TO
BECOME RETAILERS WE'RE NOT
INCENTIVIZING FIFTIES TO HAVE
RETAIL AT THE HEART OF THE
ORGANIZATION AND THE INDUSTRY.
AND PART OF THIS PROBLEM AT ALL
OF THE REGULATORY PENALTIES THAT
ARE VALUABLE TO US FOR LATE
PAYMENT OF TAXES. IF YOU'RE
UNAWARE THERE'S A 50% PENALTY
FOR A LATE TAXES. OR ANY
CANNABIS SAID THAT NEED TO BE-
GIVEN BACK WITH THE GFA. ADDED
ON TOP OF AN EXISTING CONVERCENT
PENALTY FOR ALREADY EXISTING
TAXPAYERS UNDER PTSA LEADING ANY
OTHER COMPANY THAT IS IN A LATE
PAYMENT OF 50% PENALTY ON THE
ALREADY AGREED JUST LEVEL OF
TAXES. NOW IF WE DO TALK ABOUT
COST. WHEN YOU GO THROUGH A
SMALL LIST OF WHERE THE COST OF
COMING FROM A FARM COMPLIANCE
COST CULTIVATION TAX.
TRANSPORTATION COSTS PROCESSING
COSTS STORAGE COSTS PERISHABLE
GOODS DISTRIBUTION TAX. SALES
TEAM COST EXCISE TAX ON HOTEL
COSTS AND RETAIL SALES TAX LOCAL
GROSS RECEIPTS TAX AND FINALLY A
FEDERAL TAXES ONLY ALLOWED TO
DOCK CHEAPER CAR. THEY KNOW
THEIR NORMAL BUSINESS AND- THIS
IS WHAT THE CANNABIS INDUSTRY
DEALING ONE. HIS IS WHAT
RETAILERS ARE DEALING WITH
CURRENTLY RIGHT NOW AS WE TRY TO
MANAGE ALL THESE COSTS AND
PAYMENT. AND I DO NOT THINK THAT
WE SHOULD BE- AFFECTING TAXES
BEFORE THE CUSTOMER. PAID FOR
THE PRODUCT THUS LEAVING OUT
MORE LIKE THE SALES TAX WHICH
ALL OF US IN THE RETAIL SPACE
HAS BEEN ABLE TO. COMPLY WITH I
REALLY THINK ARE ACTUALLY
ACTUALLY MORE LIKE OUR SALES TAX
AND TAKE ALL THE OTHER- COST OF
GOODS AND REQUIREMENTS AND
TAXES. OUT OF THE COST OF
COMPLIANCE- AND PUT IT MORE INTO
THE HANDS OF THE CONSUMER AND
THE CONSUMER IS ALSO BEING
QUITE. A. PRICE SENSITIVITY OF
CONSUMERS OVER EIGHT EIGHTEEN
YEARS THAT I'VE SEEN BEHAVE
CHANGE. THEY CHANGED THEIR
QUICKLY TWENTY. ONE TOOK ON
REGULATORY A PROFIT FOUR. THEIR
BEHAVIORS CHANGED AND CONSUMERS
OF CHANGED THE PROBLEM IS THE
THAT WE WORKED. A THE NEWLY
RIGHT WE CAME. THE FOUR EVEN ARE
START TO HEAR. IN ADVERTISED.
THAT HE'LL GOOD AND DRUNK. RIGHT
SHE. ADVERTISEMENT THE OPERATOR
THAT IT IS CHEAPER BUY. INTO IF
WE ARE NOT TO THAT WE ARE. TO
FOR AND- OF THE LIFT OFF THE IS
GROWING YEAR OVER YEAR AND WE
ARE GOING TO IN THE FOR ANOTHER
ON DRUGS. WITH OVER ENFORCEMENT
WE NEED TO FIND A COMPETITIVE
NATURE BELIEVE THE CANNABIS
INDUSTRY IN A PLACE TO COMPETE
WITH ALREADY EXISTING CUSTOMERS
IN CALIFORNIA. THANK YOU FOR
THAT YOU KNOW THAT WAS WELL OVER
THE MINUTE BUT YOU CAUGHT ME.
FELT MODERATOR DO WE HAVE-
ANYONE ELSE ON THE LINE I THINK
WE HAVE ONE MORE PERSON. THERE
ARE TWO MORE IN OUR QUEUE. OKAY
NOW GO TO NUMBER THIRTY FOUR
GREAT THANK YOU AND I AM BACK IN
SO WE WILL BE TIMING THIS ITEM
IN IT. NUMBER THIRTY FOUR PLEASE
GO AHEAD. SHE ALSO ECHOED THE
SENTIMENTS OF JERRY WHO JUST
SPOKE ABOUT SOCIAL EQUITY
PARTICIPANT WHO'S WAITING TO GET
A LICENSE IN LOS ANGELES AND
SINCE THE RETAILERS IN THAT AREA
DO NOT HAVE THE ABILITY TO HAVE
THE TWO EIGHTY TAX RESTRICTIONS
LISTED AND HAVE AN EXCISE TAX
THE CITY EDITION TO ALL THE
STATE TAXES. IT DOES MAKE IT
VIRTUALLY IMPOSSIBLE LITERALLY
IMPOSSIBLE TO COMPETE WITH THE
ILLICIT MARKET I USE MY TIME
THANK YOU. THANK YOU FOR THAT
MODERATOR- NEXT PERSON IN THE
QUEUE. WE'LL GO TO NUMBER THIRTY
ONE. GOING. NUMBER THIRTY ONE
PLEASE GO AHEAD. HI MY NAME'S
RON CLAIBORNE. ONLY LICENSED
LEGACY AND EQUITY APPLICANTS-
HAVE A GOOD RECEIVER ON I WANT
TO THANK THE CALLER THAT SHE
ACTUALLY INSPECTED DOESN'T YOU
MONTHS AGO AND SHE SPOKE TO SOME
OF THE PROBLEMS THAT WE JUST HER
AT OUR FACILITY- ESPECIALLY WITH
THE TAXES COMPARED TO. ON
OUTDOOR VERSES INDOOR AND
OUTDOOR PRODUCT GETS LESS THAN
HALF AS MUCH VALUES AND OUR
PRODUCT AND YET IT'S STILL TAX
THE EXACT SAME FOR CULTIVATION
TAX- IF WE COULD AT LEAST
SUSPEND THE CULTIVATION TAX HE
FOR ONE ACRE IN UNDER THIS WOULD
HELP PROTECT LEGACY IN EQUITY
TAKE PEOPLES- INSTEAD OF. JUST
GETTING INTO ALL BIG CORPORATE
ENTITY THAT ONE- I'D LIKE TO
ADDRESS SOME OF MR ROSS'S
COMMENTS ON THESE TAXES ARE THE
BIGGEST DRIVER TO THE LIST OF
MARKET- DELISTED MARKET HAS YOU
KNOW EASY EASY HEADS UP ABOVE
ALL THE BECAUSE THERE'S NO TAXES
AND BILL THERE WILL NEVER BE. A
FAIR MARKETPLACE WITH UNFAIR TAX
AND THEN THE ONLY WAY TO BE THE
LEGAL MARKET IS TO CREATE A FAIR
MARKETPLACE- WE'VE BEEN IN THE
HEART OF. ARSENAL HERE HUMBLE
CAL THAT'S LEGIT PROBABLY
THIRTY. AND- ENFORCEMENT WORKED
. IN MANAGED DOESN'T WORK. AND
WE WILL IT GO ON WATCH. THE
FEDERAL. AND THE FOR ACTORS FOR
YEARS THIRTY YEARS UP HERE AND
IT HAVE WORKED IN YOU CAN DO
THAT ALL ACROSS THE COUNTRY. IT
WON'T WORK THERE EITHER- AS AS
THE LEGAL MARKET SHE POPPED UP
WE WATCH NOW OTHER STATES.
IMPORTER CANNABIS FOR CHEAPER
THAN WE CAN PRODUCE IN
CALIFORNIA NOW BECAUSE- THEY
HAVEN'T JERRY BANDAGES. CHIU
THEIR LICENSING. REGIMES IN
DIFFERENT STATES- CAL BIGGER
PROBLEM THAN JUST WHAT'S BEEN IN
ANYMORE- AND SO YEAH HELP THE
PEOPLE THAT ARE. IN SOME OF
THESE TAX. MAYBE TAKE ACTUALLY
TAXES FROM THE EQUITY DISPENSED
. GIVE US SOME SORT OF- OF HOPE.
BEING THAT WE DON'T HAVE THE
NAME CAPITAL LITTLE ON THE OTHER
OPERATORS. THANK YOU FOR LETTING
ME SPEAK MORE THAN A MINUTE I
APPRECIATE IT. YOUR WELL. AT
MODERATOR ARE THERE ANY OTHER
CALLS THE QUEUE. WE HAVE ONE
MORE IN OUR QUEUE. OKEY DOKEY
AND WE'LL GO TO LINE FORTY.
AFTERNOON JEANINE COLEMAN
EXECUTIVE DIRECTOR OF ORIGINS
HELPFUL- WE REPRESENT NEARLY
NINE HUNDRED LIFE AND SMALL
INDEPENDENT CANNABIS BUSINESSES
AND SIX OIL PRODUCING COUNTY
COUNTIES THROUGHOUT CALIFORNIA.
HUNDREDS OF SMALL INDEPENDENT
CANDIDATES FARMERS CURRENTLY
FACE A SIGNIFICANT RISK OF
DROPPING OUT OF THE LIGHT MARKET
DUE TO COLLAPSE IN THE WHOLESALE
MARKET PRICES FOR CANNABIS
FLOWER. COMPOUNDED BY A FLAT
WAIT A CULTIVATION TAX WHICH
REMAINS THE SAME REGARDLESS OF
MARKET CONDITIONS. THE
CHALLENGES ARE PARTICULARLY
SEVERE FOR OUTDOOR CANNABIS
FARMERS WHO TYPICALLY HAVE LOWER
YIELDS AND SELL PRODUCTS HERBAL
CRISIS THEN HOPE VENTURES
UTILIZED MORE INTENSIVE
CULTIVATION METHODS. NUMBER OF
TWENTY TWENTY ONE HOTEL PRICES
FOR OUTDOOR CAMERAS HAVE DROPPED
FROM APPROXIMATELY A THOUSAND
DOLLARS A POUND YOU'RE PROBABLY
THREE OR FOUR HUNDRED DOLLARS A
POUND. DURING THE SAME TIME THE
WAIT IS CULTIVATION TAX ON
CANNABIS BUYERS INCREASED FROM
ONE HUNDRED FIFTY FOUR DOLLARS A
POUND YOU. GET ONE DOLLARS AN
OUNCE. AS A RESULT STATE CALLED
THE TAX ALONE ACCOUNT TOWARDS
PERCENT OR MORE. CRISIS ARE. AND
WHILE CURRENT WORKING. HAVE
HIGHLIGHTED THE INEQUITY OF THE
CULTIVATION TAX MANY OF THE
CULTIVATION TAX LIMITATIONS ARE
INHERENT TO OUR BASE WITH. A
FARM BASED TAX ON AGRICULTURAL
PRODUCTS. BIGELOW WEIGHT BASED%
TAX ON CAMPUS FAR CANNOT ACCOUNT. FOR WIDELY VARYING DEGREES OF
FLOUR. ALL RIGHT WIDELY VARYING
GRADES OF FLOUR WHICH CAN BASED
FISHING MATHIS. ALSO EVEN BASED
ON THE CULTIVATION PRODUCED BY A
SINGLE PLANT. MANY OF THE LEGACY
SMALL FARMS THAT WE REPRESENT
OUR HOMESTEAD FARMERS CANNABIS
IS NOT JUST A BUSINESS FOR THEM.
IT'S THEIR LIVELIHOOD THEIR
HOMES AND THEIR WAY OF LIFE. WE
MUST SEE THE ELIMINATION OF THE
CULTIVATION TAX THIS YEAR IF WE
ARE TO PROTECT THOUSANDS OF
SMALL HELP HOMESTEAD FARMERS
THAT HAVE HAD. THE COURAGE TO
STEP TOWARD THE REGULATED.
FRAMEWORK THANK YOU SO MUCH FOR
YOUR TIME. THANK YOU MODERATOR
N. AS ANYONE JOIN THE QUEUE. WE
DID HAVE ONE MORE JOIN OKAY.
WHAT A LINE FORTY ONE. CALL YOUR
UP. AARON AND MEMBERS AT LEAST
TO CREATE YOUNG FROM THE
CALIFORNIA CANNABIS
MANUFACTURERS ASSOCIATION WE
APPRECIATE THAT IS DEFINITELY AN
ONLINE ORSELVES OF THE COMMENTS
MADE BY HE THAT AND ALSO THE
REST OF THE INDUSTRY WEEKEND
RATE PLAN YOUR RESOURCE AND
ACCESS AND FINDING A WORKABLE
TAX FRAMEWORK. THANK YOU. THANK
YOU. MODERATOR HAS ANYONE ELSE
POP INTO THE QUEUE. AT THE TIME
WE HAVE NO OTHERS IN OUR QUEUE
ALL RIGHT WELL THANK YOU
MODERATOR AND I WANT TO THANK
EVERYONE WHO CAME TODAY M.
HEARING ROOM TODAY TO TESTIFY IN
PERSON AND ALL OF THOSE THAT YOU
ALL SHARED- YOU COMMENTARY
THROUGH THE PHONE- IT WAS VERY
IMPORTANT TO HEAR YOU- SO HAVING
HEARD FROM ALL THE MEMBERS OF
THE PUBLIC I'M GOING TO JUST
TURN IT BACK TO COMMITTEE
MEMBERS TO SEE IF ANY OF YOU
HAVE ADDITIONAL QUESTIONS OR
COMMENTS. BEING KATIE THIS
DEVICE CARE THANK YOU MANAGER.
YEAH THIS IS A KIND OF AN
AGONIZING THING WE DEAL WITH IN.
CALIFORNIA TODAY AND I MUST TELL
THIS INDUSTRY. WELCOME TO
CALIFORNIA. YOU ARE NOT ALONE.
MILLIONS OF CALIFORNIA'S ARE
SUFFERING UNDER THE BURDEN OF
REGULATION AND TAXES IMPOSED BY
THE STATE. OUR BUDGET COMMITTEE
IS RESPONSIBLE FOR TRYING TO
MANAGE ALL THOSE RESOURCES ARE
SPENT AND DEPLOYED. I DO
APPRECIATE YOUR PROBLEMS. THE
GOOD STAFF THE LION PLOY TO
SERVE THE MILLION PEOPLE I
REPRESENT. ARE INUNDATED DAILY
WITH COMPLAINTS ABOUT THEIR OWN
PROFESSION THEIR OWN BUSINESS
THIS IS YOUR- AND IF DARN
CALIFORNIA FOR WHAT THE STATE
HAS BECOME. THIS INDUSTRY IS
ONLY ONE OF THE MORE RECENT.
COME INTO EXISTENCE. MY FACE
THOSE BURDENS. WE APPRECIATE
YOUR COMMENTING I MUST SAY IT A
LOT OF WHAT I THINK YOU WANT I
CANNOT GO ALONG WITH SOME I
CAN'T IN APPRECIATED THE
INFORMATION THAT WE RECEIVE
TODAY AND THE HEARING THANK YOU
MADAM CHAIR THANK YOU MR VICE
CHAIR SENATOR KABIRU THANK YOU
VERY MUCH MADAM CHAIR I JUST
WANT TO SAY THANK YOU TO ALL THE
PARTICIPANTS I THINK THIS IS
BEEN A REALLY HELPFUL. HEARING
WE'VE COME A LONG WAY IN THE
PAST TEN YEARS- IN IN TERMS OF
GOING FROM AN ILLICIT ILLEGAL
MARKET TO A LEGAL MARKET- AND
THEIR REASONS THAT- THAT THAT
THAT THE TAX SYSTEM WAS SET UP
THIS WAY- IT'S A THIS IS OUR
OPPORTUNITY TO TRY TO UNRAVEL IT
NOW THAT WE'VE GOT SOME
EXPERIENCE AND- IF I COULD JUST
SAY THAT PART OF THE CHALLENGE
WITH. WITH THE- WITH THE- THE
PROVISIONAL LICENSES IN THE THIS
HAS TO DO WITH THE LOCAL
GOVERNMENT ORGANIZATIONS.
DECIDING THAT THEY WEREN'T GOING
TO ALLOW CANNABIS IN THEIR
COMMUNITY- THEY'VE DRAGGED THEIR
FEET IN TERMS OF- CREATING A
PROVISIONAL LICENSE AND- WE'RE
GONNA NEED SOME HELP ON THIS
BECAUSE THE AS I RECALL
PROPOSITION SIXTY FOUR LEFT IT
UP TO LOCAL GOVERNMENT THAT WAS
PART OF THE SALE THE SALE JOB-
WITH IT LOCAL GOVERNMENTS
COULDN'T PROHIBITED BUT BAD TO
DECIDE HOW THEY REGULATED IT AND
SO WE MADE NEEDED IT COME BACK
AND TAKE A LOOK AT THAT THIS HAD
TO DO WITH THE TAX PART OF IT
AND I REALLY APPRECIATE THAT.
THE INFORMATION- BECAUSE I THINK
WE NEED TO MAKE SOME CHANGES AND
UP FOR MY PART I WANT TO COMMIT
TO OUT LOOKING AT THOSE CHANGES
INTO DOING ANYTHING THAT- THAT'S
THAT'S POSSIBLE HERE IN THE
LEGISLATURE TO MAKE IT RIGHT WE
MAY HAVE TO GO BACK OUT IN ORDER
TO CHANGE SOME PARTS OF IT BUT-
BUT THAT THAT WE CAN CHANGE
OURSELVES I'M I'M COMMITTED TO
DOING IT SO THANK YOU VERY MUCH
MANAGER FOR HOLDING THIS HEARING
. THANK YOU SENATOR CAFIERO AND
I JUST WANT TO THANK. THE
PANELISTS AND ONCE AGAIN THE
CALLERS- YOU KNOW. YOU FOR YOUR
COURAGE BECAUSE ESSENTIALLY YOU
ARE HAVE BEEN GUINEA PIGS FOR
THIS EXPERIMENT CALLED. OF THE
LEGALIZATION OF CANNABIS. AND
THIS HEARING IS REALLY FOR US TO
GAIN MORE INFORMATION AND
INSIGHT TO FIGURE OUT HOW TO DO
THIS BETTER- IT IS HERE TO STAY.
WE OBVIOUSLY WANT TO BE
SUPPORTIVE OF A LEGAL MARKET.
AND WE DO WANT TO ENCOURAGE
THOSE WHO ARE IN IT TO BE ABLE
TO STAY AND TO EXPAND BECAUSE IT
IS EVIDENT THAT CANNABIS ISN'T
GOING ANYWHERE. I THINK WE HAVE
TO PROBABLY- UP. OPEN BACK UP
LINES OF COMMUNICATION AROUND
WHAT PARTS OF THE STATE ARE
RESPONSIBLE FOR WHAT PORTION OF
THIS INDUSTRY IF YOU'RE INTO AND
THAT IS WHERE LOCALS COME INTO
PLAY TO WHO'S RIGHT WHO DOES
DELIVERY WHO ALLOWS FOR
DISTRIBUTION. WHO LOOK REAL OUT
ALLOWS FOR RETAIL AND GROWING X.
SENTARA. BUT ULTIMATELY HOW DO
YOU CREATE A SYSTEM THAT'S
HOLISTIC AND HOW IT IS
SUPPORTIVE OF INDUSTRY OF
CONSUMERS AND ALSO HAS A TAX-
RATE AND FORMULA THAT MAKES
SENSE FOR THE INDUSTRY TO
THRIVE- SO ONCE AGAIN I WANT TO
THANK. YOU TO ALL OF THE
INDIVIDUALS WHO PARTICIPATED IN
PUBLIC TESTIMONY TODAY. IF YOU
WERE NOT ABLE TO TESTIFY TODAY.
PLEASE SUBMIT YOUR COMMENTS OR
SUGGESTIONS IN WRITING TO THE
BUDGET AND FISCAL REVIEW
COMMITTEE OR VISIT THE WEBSITE.
YOUR COMMENTS AND SUGGESTIONS
ARE IMPORTANT TO US AND WE WANT
TO INCLUDE YOUR TESTIMONY IN THE
OFFICIAL HEARING RECORD. SO
THANK YOU AND WE APPRECIATE YOU
YOUR PARTICIPATION- WE HAVE
CONCLUDED THE AGENDA FOR TODAY'S
HEARING AND ON THE SENATE BUDGET
IN FISCAL REVIEW COMMITTEE
SUBCOMMITTEE FOR IS ADJOURNED
CAN YOU HIT THE GAVEL FOR ME MR
VICE CHAIRED OKAY OR YOU CAN
PASS IT. ADJOURNED THANK YOU.