MUSK SAYS $44 BILLION DEAL TO BUY TWITTER IS ‘ON HOLD’
Tesla CEO’s tweet raises new doubts
Tesla billionaire Elon Musk has put his plan to buy Twitter on what he called a temporary “hold,” raising fresh doubts about whether he’ll proceed with the $44 billion acquisition.
Musk tweeted early Friday that he wanted to pinpoint the number of spam and fake accounts on the social media platform. He has been vocal about his desire to clean up Twitter’s problem with “spam bots” that mimic real people, and he appeared to question whether Twitter was underreporting them.
But the company has disclosed in regulatory filings that its bot estimates might be low
for at least two years, leading some analysts to believe that Musk could be raising the issue as a reason to back out of the purchase.
“Twitter deal temporarily on hold pending details supporting calculation that spam/ fake accounts do indeed represent less than 5 percent of users,” Musk tweeted Friday morning, indicating he’s skeptical that the number of inauthentic accounts is that low.
On Friday, Musk subsequently tweeted that he’s “still committed to acquisition.” Neither Twitter nor Musk responded Friday to requests for comment. Musk has conducted a long flirtation with Twitter that culminated in an April deal to acquire the social platform.
The problem of fake accounts on Twitter is not a secret.
In its quarterly filing with the U.S. Securities and Exchange Commission, Twitter itself expressed doubts that its
buds. But to make up for those lost funds, the state after three years would raise the excise tax imposed on retail cannabis purchases to 19 percent, up from the current 15 percent.
But an excise tax jump could come sooner.
If the state isn’t taking in enough cannabis tax money to support a range of education, law enforcement and other programs — a total of $670 million each year — the excise tax could be stepped up to cover that gap as soon as January 2024, though not necessarily to the 19 percent level. Additionally the state is putting up a one-time $150 million stream of funds to help cover those costs.
The tax debate presents a dicey political challenge for Newsom, who is seeking a second, four-year term in November. He’s being pressured by financially struggling businesses that want a deep tax cut, but youth and other organizations that benefit from those dollars don’t want to see that funding dry up.
Other provisions in Newsom’s plan include about $20 million for grants to communities to accelerate licensing for retail shops. While cannabis is legal in California, many communities have either banned it or not set up local licensing programs for markets to operate. There are less than 1,000 retail shops, down from about 8,000 before broad legalization kicked in, businesses say.
Overall, the governor’s proposed changes would “greatly simplify tax compliance, reduce the overall tax burden for our licensees and help stabilize the legal market,” said Nicole Elliott, director of the state Department
of Cannabis Control.
If approved, the plan would represent the first change in tax policy since legal sales kicked off. However, some taxes, including cultivation, have increased over that time.
The plan disappointed leading businesses, which had been seeking elimination of the cultivation tax, along with a cut in the excise tax imposed on retail sales to 5 percent, down from 15 percent, among other changes.
Jerred Kiloh of the United Cannabis Business Association, a Los Angelesbased trade group, said the plan would not allow companies to reduce steep consumer prices that have been driving buyers into the underground market, where taxes are not imposed and prices are cheaper.
And it’s even possible the plan could result in higher
costs for consumers at the retail counter, Kiloh warned.
“All they are really doing is shifting some taxes around, and it’s not ever going to get to the customer,” Kiloh added.
Cannabis is covered by a range of state taxes, and it also can be taxed at the local level. Currently, state taxes include a cultivation tax on buds, leaves and plants, the 15 percent excise tax on retail sales and the usual sales tax.
Lindsay Robinson of the California Cannabis Industry Association viewed the plan as an initial step that didn’t do enough to crack down on illegal sales. “It’s kicking the can down the road,” she said.
There will be no quick fix. Speaking with reporters in Sacramento, Newsom said the proposal marked “the beginning of a process” to force illegal operators into
retreat that would take years.
The proposal is subject to review in the Legislature, where it could be modified.
Cannabis remains illegal at the federal level, though most Americans live in states with at least some access to legal marijuana.
It’s difficult to make state-by-state comparisons on marijuana tax burdens because many different approaches are used, and some states limit sales only to medicinal marijuana. In Washington state, there is a 37 percent excise tax on broad legal sales. When New York opened the way for broad legal sales last year — a process that is still unfolding — the levies included a tax based on the level of THC, marijuana’s active ingredient.