By Associated Press
(AP) — A coalition of marijuana companies, churches and advocacy groups is asking California Gov. Gavin Newsom for a temporary cut in the state’s hefty marijuana taxes.
The group warned in a letter to the governor that the coronavirus crisis and a crashing economy will take an especially heavy toll on marijuana businesses.
“If action is not taken now many of our business colleagues and friends may be pushed into the gray, or worse, back into the illicit market,” the letter stated. “At a time where unemployment is at a record high, the legal industry is seeing its customers flock to lower priced cannabis products in the illegal market regardless of quality or safety.”
California kicked off recreational sales in 2018. But the state’s legal marijuana industry has long blamed tax rates that can approach 50% in some areas for driving customers into the illicit market. According to some estimates, consumers are spending roughly $3 in the state’s underground pot economy for every $1 in the legal one.
Cannabis companies weren’t included in the federal coronavirus rescue package.