California Cannabis Tax to be Lifted to Aid Cultivators

by Travis C | Jul 7, 2022 | Blog, Business, Cannabis Business, Cannabis Law, Cannabis Law and Compliance, Cannabis News, Growing, Industry News, Legalization, Marijuana

California cannabis cultivation tax to be lifted

In an effort to aid cannabis cultivators that have been hanging on by a thread the past several years, California is completely overhauling its cannabis tax codes to try and help.

The changes, which were adopted last week as part of a broader state budget agreement, will also create tax credits for some cannabis businesses, expand labor rights within the industry and switch collection of a state excise tax from distributors to retailers. That tax will pause at 15% for three years, after which regulators could raise the rate to recoup lost revenue from discontinuing the cultivation tax.

Advocates believe the new tax plan will aid the struggling small businesses operating in the legal cannabis industry in California. With exorbitant application fees, license costs and strict regulatory oversight set by local jurisdictions, it has become untenable to run a small-scale cannabis operation in the state.

While this may just be a band aid over the larger issues plaguing California’s legal cannabis industry, it should at least help cultivators stand a better chance of staying afloat in the competitive industry.

Prior to the removal of the tax, cannabis cultivators had to pay a tax of over $10 per ounce of flower. With 16 ounces in a pound, and the price of a pound of cannabis flower tanking as low as $500 in the last year, growers were potentially paying nearly half of their profit just into taxes for cultivation.

Additionally wholesale prices have dropped by as much as 50% over the past year, particularly squeezing farmers whose outdoor crops sell for less and forcing many smaller operations to close down.

Even the trimmings of cannabis plants were taxed at $3 per ounce, making a byproduct of the cultivation process that can be used to create ointments, creams or extracts just as untenable.

And of course, all of the increased costs levied on growers is then transferred to distributors, then retailers, and finally passed on to the consumer. Officials and advocates are hoping the move will lower cannabis prices overall for consumers while making it more profitable for cultivators.

However the state has yet to take any action on retail sales taxes. Business owners and advocates claim that California will never be able to compete with illicit market cannabis which is just as large in the state due to current taxes.

For comparison, alcohol in the state is only taxed at the state sales tax of 6%, with an additional charge of $3.30 per gallon. Cannabis on the other hand, in addition to state and local sales tax, is levied a 15% additional sales tax.

In other words, a customer who thinks they may be getting a deal on a $100 ounce, could actually be paying over $120 for the same product after taxes. Exorbitant sales tax on cannabis is extremely common in legal cannabis industries across the country. Medical cannabis sales in most states have no additional tax at all.

Lastly, the latest removal of the taxes is set to last only 3 years. While this gives advocates time to fight for more ground and lower additional taxes, reform licensing and equity access to the industry, the fight is not nearly over for cultivators and business owners in California’s cannabis industry.

Legal gray area leaves potential Missouri cannabis growers in limbo

by The Real Dirt | Mar 15, 2022 | Blog, Business, Cannabis Business, Cannabis Law, Cannabis Law and Compliance, Growing, Medical Marijuana

NORTH MISSISSIPPI (WMC) – It’s been well over a month since the Mississippi Medical Cannabis Act was signed into law. However, potential cannabis growers in Mississippi are hesitant on how to proceed in growing their product.

Ambiguity in the signed legislation doesn’t specify if greenhouses are considered indoor or outdoor grow.

The difference is outdoor grow is strictly prohibited under the law.

“We fought so hard for these last two years, over two years, to get something passed,” said Zack Wilson with We are the 74. “Here we are, we have something passed, and now it’s another set of hurdles.”

Wilson, a resident of Byhalia, has been planning on building greenhouses for months, already setting up the framework for one on his property.

He’s put a pause on that after seeing greenhouses are not officially defined in the law.

You don’t have to look far in the 445-page bill.

On page 2, the bill reads “Cannabis cultivation facility” means a business entity licensed and registered by the Mississippi Department of Health that acquires, grows, cultivates and harvests medical cannabis in an indoor, enclosed, locked and secure area.

Wilson said in his conversations with his local legislators, the feeling is greenhouses do not offer the same level of security as a brick and mortar structure.

Wilson disagrees.

“A greenhouse is totally enclosed, so as far as I’m concerned that is indoor,” Wilson said. “Locked? There are doors. There’s a lock on it, just like any other building. A secure area? That means we put it inside a fence. Myself, personally, I’m in the middle of 200 acres. If somebody were to find my stuff, they would have to fly over it to find it.”

“It leaves everybody in limbo that’s actually going to do a greenhouse grow,” said Todd Franklin, owner of Franklin Farms.

Franklin built two greenhouses, 3,000 sq. ft. and 1,800 sq. ft. in 2021 before the original Initiative 65, the cannabis program Mississippians voted on in the 2020 elections, was overturned by the state Supreme Court.

He was ready to build more but has also paused construction due to the uncertainty of if greenhouses would be considered indoor grow.

“If you call the department of health, they tell you to go to their website. You click on their website and there’s nothing there,” Franklin said.

In our attempts to find some clarity from the Mississippi Department of Health, asking if greenhouses are considered indoor or outdoor grow, we were told the department doesn’t have an answer for us at this time.

“It is important to remember that beyond determining what is indoor growing – the same indoor security measures would apply. While the program is in development, I encourage you to visit or website and read the bill for answers,” an MSDH spokesperson said.

“Greenhouses are pretty much the industry standard. Why would we want to pull more from our power grid when we have mother nature above us,” Wilson said, gesturing up to the sun.

Both Wilson and Franklin said they would have 24/7 security systems on their properties once growing began.

Franklin doesn’t want to be caught behind the curve.

Read Full Story from Jackson WLBT

Cannabis cultivators again facing severe wildfire season

by The Real Dirt | May 21, 2021 | 420 News, Blog, Business, Growing, Hemp

forest fires threaten cannabis farmers in the west for another year.

Historic drought conditions again will bring the threat of extreme wildfires to U.S. cannabis growers, especially those in Western states.

Wildfires and the ash and smoke created by them are becoming a bigger threat to life and property as average temperatures rise and water resources dwindle amid climate change.

Western states experienced historic destruction in the summer of 2020, when everything seemed to be on fire, including cannabis farms in California and Oregon.

Smoke and ash also blocked out essential sunlight and delayed the growth of outdoor marijuana plants by weeks, leaving growers with less-than-ideal options for when to harvest their plants.

Last season’s 58,950 wildfires burned 10.1 million acres across the United States, double the acreage burned in 2019 and almost 2.3 million more acres than the 10-year-average.

But that is not uncommon.

In four of the past 10 years – 2020, 2017, 2015 and 2012 – wildfires have burned 9 million or more acres in the U.S.

Three of Colorado’s largest recorded wildland fires – Cameron Peak, East Troublesome and Pine Gulch – occurred in 2020, tearing through more than half a million acres combined.

California had its worst wildfire season on record, with an estimated 4.3 million acres burned, 33 fatalities and 10,488 structures damaged or destroyed.

And the conditions that feed large wildfires already are worse this year.

Reservoirs across much of the West are sitting at below average levels, and snowpack runoff is not expected to provide much relief.

Southwestern states, including Arizona, Nevada, New Mexico and Utah, recorded their driest April-March period in 126 years.

The situation is similar in California and Colorado.

In fact, the amount of water in the snowpack has dropped to below normal for much of the West, excluding parts of Alaska and Washington state.

A map showing the lack of snow water going into this years wildfire season.

Drought conditions, a key indicator for predicting wildfire seasons, escalated this month compared to the same time last year.

The U.S. Drought Monitor’s latest outlook, released last week, shows that much of the area where cannabis is grown in the West and Southwest is experiencing extreme and exceptional drought conditions, which can lead to water emergencies and widespread crop and pasture losses.

Read Full Article on MJ BIZ DAILY

Grower to Grower with Little Hill Cultivators

by Travis C | Oct 29, 2019 | 420, cannabis business, cannabis culture, cannabis industry, growing, Season 3, The Real Dirt Podcast Episodes

Podcast: Play in new window | Embed

The Real Dirt is known for interviewing some pretty great cannabis growers. But this episode isn’t really an interview.

Jeff from Little Hill Cultivators has been an almost regular guest on The Real Dirt, and one of our most reliable sources of insight into the current California cannabis industry. As a long time medical cultivator, Jeff transitioned into the recreational industry as well after legalization in California.

With any new legal cannabis industry there is bound to be some red tape, but California just about takes the cake, and wraps it up in red tape. Comparatively, Oklahoma has just about none.

Barriers to entry for cannabis growers

We can all agree that there needs to be some barriers to entry for cannabis growers in a legal industry. But each state varies on how many barriers they set up.

Oklahoma legalized medical cannabis in 2018, with sales taking off without a hitch in 2019, faster and with more growth than any other state. This is because they had almost no barriers to entry, and even made it easier for out of state cannabis growers to come in and get started.

Up until the end of August 2019, any potential cannabis entrepreneur could move to Oklahoma, live there for 30 days, get residency and pursue state licensing. Now (post August) anybody trying to enter the Oklahoma medical cannabis industry from out of state must live in-state for two years before getting residency.

California on the other hand restricted anybody from getting a recreational cannabis license that didn’t already have a medical cannabis license and operation. On top of that, the application fees were insanely high, with additional charges for obtaining the license after approval.

Talking grower to grower

Talking about growing cannabis with somebody who just started or even has been doing it for a few years is nothing like two veteran Northern California cannabis growers getting together. There’s no beating around the bush, just Chip and Jeff talking about each others’ grows, what they each do differently and why.

We all know some growers that think they got the best set up, grow the best ganja and won’t hear a word that says otherwise. It takes years of learning, seeing other grows and assessing your own problems that you can really sit down and talk, grower to grower.

And this episode is just part one.

Stay tuned for part two

In part two of Grower on Grower with Little Hill Cultivators, Chip and Jeff continue their conversation about California’s strict regulations, Oklahoma’s growing industry, drip irrigation, industry predictions and more.

Follow us on Instagram (@therealdirtpodcast) and Facebook (@therealdirt) to stay updated on the next episode’s release and get fun cannabis content in the meantime.

Listen on Apple Podcasts

Listen on Spotify

Podcast: Play in new window | Embed