This bill is part of the 2020 Cannabis Bills section of our ongoing update on California Cannabis Legislation – see the full California Cannabis Law Legislative Update which includes information on cannabis bills from other years.
AB 1872 (Committee on Budget) Cannabis.
The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), establishes in state government a Cannabis Control Appeals Panel to review specified decisions of licensing authorities appealed by any person aggrieved by those decisions. MAUCRSA requires that the panel consist of one member appointed by the Senate Committee on Rules, one member appointed by the Speaker of the Assembly, and 3 members appointed by the Governor, as specified. Existing law requires that each member, at the time of their initial appointment, be a resident of a different county from the one in which either of the other appointed members resides.
This bill would limit the residency requirement to the members of the panel appointed by the Governor.
(2) AUMA imposes an excise tax commencing January 1, 2018, on the purchase of cannabis and cannabis products at the rate of 15% of the average market price of any retail sale by a cannabis retailer. Existing law defines average market price in an arm’s length transaction to mean the average retail price determined by the wholesale cost of the cannabis or cannabis products sold or transferred to a cannabis retailer, plus a mark-up, as determined by the California Department of Tax and Fee Administration on a biannual basis in six-month intervals.
This bill would prohibit the department from increasing the mark-up amount during the period beginning on and after the operative date of the bill and before July 1, 2021.
(3) Commencing January 1, 2018, AUMA, and as additionally amended by statute, also imposes a cultivation tax upon all cultivators on all harvested cannabis that enters the commercial market, at specified rates per dry-weight ounce of cannabis flowers and leaves, as specified. AUMA requires, beginning January 1, 2020, these tax rates to be adjusted by the California Department of Tax and Fee Administration annually thereafter for inflation.
This bill would, notwithstanding that requirement, prohibit those tax rates that are imposed in the 2021 calendar year from being adjusted for inflation unless the adjustment is for an inflation rate that is less than zero.
(4) AUMA requires the Department of Finance to estimate revenues to be received from specified taxes on cannabis and cannabis products and to provide those estimates to the Controller no later than June 15 of each year. AUMA requires the Controller to use these estimates to disburse funds deposited in the California Cannabis Tax Fund, a continuously appropriated fund, in accordance with specified requirements. AUMA requires the Controller, by July 15 of each fiscal year beginning in the 2018-19 fiscal year, after making other specified disbursements from the California Cannabis Tax Fund, to disburse 60% of the funds deposited during the prior fiscal year into the Youth Education, Prevention, Early Intervention and Treatment Account, 20% into the Environmental Restoration and Protection Account, and 20% into the State and Local Government Law Enforcement Account. Of the 20% deposited into the State and Local Government Law Enforcement Account, AUMA requires the Controller to disburse moneys from the State and Local Government Law Enforcement Account to the Board of State and Community Corrections for grants to local governments to assist with law enforcement, fire protection, or other local programs addressing public health and safety associated with the implementation of AUMA. AUMA prohibits the board from making grants to local governments that have banned the cultivation, including personal cultivation, or retail sales of cannabis and cannabis products.
This bill would instead prohibit the board from making grants to local governments that ban both indoor and outdoor commercial cannabis cultivation or ban the retail sale of cannabis or cannabis products. By removing a restriction on disbursements from the California Cannabis Tax Fund, a continuously appropriated fund, this bill would make an appropriation.
(5) AUMA authorizes the Legislature to amend its provisions with a 2/3 vote of both houses to further its purposes and intent.This bill would make specified findings and declare that its provisions further the purposes and intent of AUMA.
(6) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.
Read more about California Cannabis Legislation – see the full California Cannabis Law Legislative Update.
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