California pot companies warn of impending industry collapse. [View all]

https://apnews.com/article/business-california-tax-reform-gavin-newsom-b5852a77c8b751e49286dbcdbf1536ad

LOS ANGELES (AP) — Leading California cannabis companies warned Gov. Gavin Newsom on Friday that the state’s legal industry was on the verge of collapse and needed immediate tax cuts and a rapid expansion of retail outlets to steady the shaky marketplace.

The letter signed by more than two dozen executives, industry officials and legalization advocates followed years of complaints that the heavily taxed and regulated industry was unable to compete with the widespread illegal economy, where consumer prices are far lower and sales are double or triple the legal business.

Four years after broad legal sales began, “our industry is collapsing,” said the letter, which also was sent to legislative leaders in Sacramento.

The industry leaders asked for an immediate lifting of the cultivation tax placed on growers, a three-year holiday from the excise tax and an expansion of retail shops throughout much of the state. It’s estimated that about two-thirds of California cities remain without dispensaries, since it’s up to local governments to authorize sales and production.