FINDINGS

California’s legal cannabis market is ‘on the brink of collapse.’ Can the governor help?

Industry says heap of taxes put it at a disadvantage with the state’s illicit market

By Alexei Koseff • January 31, 2022 3:00 pm - Updated February 1, 2022 10:05 am

CalMatters

When California voters legalized marijuana for recreational use in November 2016, it was also a victory for Gavin Newsom, who spent months traveling the state as the face of the campaign. At an Election Night party at a San Francisco nightclub, the then-lieutenant governor celebrated this “point of pride,” telling attendees California had sent a “message powerfully to the rest of the nation.”

It was an important resume-building moment for Newsom, already deep into his first run for governor, who during decades in office has put himself at the forefront of political change. In a profile in Billboard magazine a few months later, he acknowledged that his legacy and that of Proposition 64, the legalization measure, were now tied together: ... “Put it this way: Everything that goes wrong, you’re looking at the poster child.”

Five years later, Newsom is governor, and farmers, dispensary owners and other advocates are calling on him to rescue a legal market they say has been pushed to the brink of collapse by a steep drop in prices — and the inattention of a man who was once its most prominent proponent.

“He championed our message and he rode our coattails all the way to the top,” said Michael “Mikey” Steinmetz, co-founder of Flow Cannabis Co., a manufacturer and distributor. “We feel that he has turned his back in some capacity.” ... The cannabis industry’s appeal for help is aggressively aimed at the heap of taxes that put it at a disadvantage with the robust illicit market in California. Steinmetz has proposed a boycott of the state’s cultivation tax unless there is financial relief in the upcoming state budget.

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