As part of his state budget for 2020-2021, Gavin Newsom proposed on Friday two sweeping changes to how cannabis is taxed and regulated in California. Streamlined taxation and regulation of the cannabis industry in the Golden State? Wonders will never cease! Let’s review what Newsom’s proposed changes would mean for the industry.

One cannabis licensing and regulatory entity to rule them all!

For starters, Newsom proposed that the trio of state entities that oversee cannabis licensing –the Bureau of Cannabis Control, CalCannabis and the Manufactured Cannabis Safety Branch– would be consolidated into one centralized governing entity: the Department of Cannabis Control by July 2021. As operators across the state will tell you, they all *love* the current situation wherein they are filling out paperwork in triplicate and being held accountable and scrutinized by three different governing agencies. Still, we remain confident that our steel-willed comrades in retail, cultivation, manufacturing etc. will hold a stiff upper lip as they learn to love reporting to just one governing agency.

Cannabis tax revisions for California, too!

But Gov. Newsom wasn’t done with his late Christmas presents to the cannabis industry. Additionally, he is calling for several significant tax changes. Take a look:

• Proposing to move responsibility for cultivation tax collection to first distributor only (no final distributor or manufacturer).
• Proposing to move excise tax collection from the distributor to retailer.

These two (relatively) simple changes would drastically reduce confusion on such matters as estimating product mark-ups and wholesale tax rates. Notably, both proposed tax changes should simplify tax burden and collection in California’s cannabis industry. If these proposed changes seem strikingly different than what the state’s beancounters suggested back in November, it’s because they are radically different (and far more in line with what the LAO recommended.)

More changes to California’s cannabis industry to come?

Newsom also made clear that the door was being left open for more changes. In his address, the governor made clear that he would be talking with industry stakeholders and operators to “support a stronger, safer legal cannabis market.” MMLG’s blogger speaks for the industry when we say, “Yes” and “Thank you.”