Taxes and tweets
Last week we reviewed a novel proposal by the state Legislative Analyst’s Office (LAO) to replace existing pot taxes with a single tax based on the THC strength in cannabis products. The LAO’s potency-based tax recommendation was met with mostly positive comments from the cannabis industry.
Perhaps tipping his hand at favoring the LAO’s proposal, Gov. Gavin Newsom talked this week about a new tax he’s proposing on vaping. Guess what? The vaping tax is also potency based as it would charge $2 for every 40 milligrams of nicotine. He says the proposal would generate tens of millions of dollars, aimed at combating the dramatic rise in vaping among teenagers, which Newsom says deeply concerns him as a parent.
Remaining on the marijuana front, Lori Ajax, Chief of the Bureau of Cannabis Control, announced on Jan. 10 that Newsom has decided to consolidate the three licensing entities — the Bureau of Cannabis Control, the Department of Food and Agriculture, and the Department of PublicHealth — into a single Department of Cannabis Control by July 2021.
Ajax said in a statement the upcoming consolidation is “an effort to improve access to licensing and simplify regulatory oversight of commercial cannabis activity. Establishment of a standalone department with an enforcement arm will centralize and align critical areas to build a successful legal cannabis market, by creating a single point of contact for cannabis licensees and local governments.”
Currently, the Bureau of Cannabis Control oversees retailers, distributors and testing labs; the Department of Food and Agriculture deals with pot farmers; and the Department of Public Health is responsible for product manufacturers. By the summer of 2021 when the three agencies are folded into the new Department of Cannabis Control, all the different entities in the marijuana industry will have a one-stop shop to conduct their business instead of having to interact with multiple state bureaucracies as is the case now.
According to Ajax, “The (Newsom) Administration will providemore details on this proposal in spring 2020.”
Clearly, Newsom’s restructuring plan is also in line with his commitment to eliminate — as much as it is possible to do so — a thriving blackmarket, which continues to siphon off untaxed pot revenue leaving large holes in state budget’s line items for pot income.
What does the pot industry think of Newsom’s plan?
“This next year is going to be very critical in seeing how quickly we can course correct and how quickly we can start to see the impacts of these changes,” said Josh Drayton, spokesman for California Cannabis Industry Association. “We have to see who survives.”
Cannabis industry consultant Jackie McGowan said, “While consolidation would be welcomed by many in the industry, if this new integrated agency were to follow the existing guidelines of the enforcement arm of the Bureau of Cannabis Control, then we will likely see more raidlike inspections throughout the entire supply chain. If the new agency were to follow the lead of the Department of Food and Agriculture, then we will likely see a much less aggressive approach toward regulating this plant.”
By the way, in his proposed budget Newsom set a 15% increase to marijuana tax revenue, from $479 million this fiscal year to $550 million in the 202021 year.
His proposed budget estimates $332.8 million will be available for the following purposes in 2020-21:
• Education, prevention, and treatment of youth substance use disorders and school retention—$199.7 million.
• Clean-up, remediation, and enforcement of environmental impacts created by illegal cannabis cultivation—$66.6 million.
• Public safety-related activities—$66.6 million.
Trump’s tweet sets record?
Believe it or not there are some folks who like the man who many Americans love to hate: President Donald Trump.
Trump sent a tweet on Sunday Jan. 12 expressing solidarity with the Iranian people and issued a further warning to the Fundamentalist Muslim regime not to kill protesters again. The message evidently struck a positive chord with those out in Tehran streets demonstrating against the authoritarian Ruling Council.
“To the brave and suffering Iranian people: I have stoodwith you since the beginning of my presidency and my government will continue to stand with you,” Trump tweeted in Farsi. “We are following your protests closely. Your courage is inspiring.”
In a second tweet, Trump said, “To the leaders of Iran— DO NOT KILL YOUR PROTESTERS. Thousands have already been killed or imprisoned by you, and the World is watching. More importantly, the USA is watching. Turn your internet back on and let reporters roamfree! Stop the killing of your great Iranian people!”
The tweet eventually amassed over 367,000 likes, with further tweets also reaching huge numbers.
According to Saeed Ghasseminejad, a senior adviser and financial economist at the Foundation for Defense of Democracies, Trump’s tweet smashed a record and displayed “a strong show of support by Iranians for Trump’s Iran policy.”
The undisputed fact is that Gen. Qassim Soleimani, who was killed in an airstrike approved by Trump at Baghdad’s international airport two weeks ago, was the enemy of not just Israel, but also the Iranian people. It was Soleimani’s strategy to shut down the internet in Iran and then shoot all the citizen protesters seeking freedom from the autocrats on the ruling council. Iran, more than any other Muslim country, has encircled Israel with surrogate terrorists forces, such as Hamas and Hezbollah, with the vowed objective to annihilate the Jewish people.
Abbas Milani, an Iranian adjunct professor in the Center on Democracy, Development and Rule of Law at Stanford University provided the most insightful comments on the situation, he said, “Soleimani was different things to different people. To regime zealots, he embodied dogmatic dedication to Shiism and to fighting the U.S. and Israel. To regime critics, he was a pillar of oppression at home and threats and attacks on dissidents abroad. Tomanywho lost loved ones in peaceful demonstrations two months, two years and 10 years ago he was a blunt instrument of oppression.”