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California Governor Proposes Using $100 Million In Marijuana Tax Revenue To Help Close State Budget Deficit, As He Commits to ‘Strengthen’ Industry

As the governor of California pledges to continue working to “strengthen” the state’s marijuana market, he’s also proposing to help close an overall government budgetary deficit by borrowing $100 million from a cannabis tax fund designated for law enforcement and other public safety initiatives.

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Gov. Gavin Newsom (D) presented his budget plan on Wednesday, previewing a series of steps he wants to take to address the state’s $37.9 billion deficit. That includes taking a $100 million budgetary loan from the Board of State and Community Correction (BSCC)’s Cannabis Tax Fund subaccount to support the General Fund.

A summary of the executive plan notes that the marijuana tax dollars, which would be repaid in a future fiscal year, would come from resources “not currently projected to be used for operational or programmatic purposes.”


The governor’s office also used the budget announcement to tout ongoing efforts to improve the state’s cannabis industry.

That’s included the “reform and simplification of the tax structure, fee relief to support entry into the legal market, investment in grant programs that foster equity, providing resources to cities and counties to expand pathways for local licensing and regulation of cannabis retailers, and assisting local governments to move licensees from provisional licensure to annual licenses.”

“Moving forward, the state will continue focusing on reforms that support and strengthen enforcement against the illegal market, and reinforce compliance, accountability, and stability within the legal market,” the summary says.

Meanwhile, after covering administrative and regulatory costs, the budget estimates that $568.9 million in marijuana revenue will be earmarked for 2024-2025 to fund education, prevention and youth substance use disorders ($341.3 million), environmental remediation and enforcement related to illicit marijuana grows ($113.8 million) and public safety initiatives ($113.8 million).

The California legislature is also looking at ways to build on the state’s cannabis market, while exploring other drug policy reforms dealing with issues such as psychedelics.

For example, Assemblymember Matt Haney (D) is renewing his push to legalize cannabis cafes in the state, with a newly introduced bill and plans to work with the governor and regulators to address concerns that resulted in the last version being vetoed.

Also, on Tuesday, a California Assembly committee unanimously approved a revised bill to create a state workgroup that would be tasked with exploring a regulatory framework to provide therapeutic access to psychedelics like psilocybin and ibogaine.

The sponsor of that legislation, Assemblymember Marie Waldron (R), will also be working with Sen. Scott Wiener (D) on a separate psychedelics therapeutic access bill that they plan to introduce in the coming weeks after Newsom vetoed a broader legalization measure last year.

While the governor vetoed both the earlier cannabis cafe bill and prior psychedelics legalization legislation, he did enact a number of marijuana measures last year, including several that took effect at the beginning of the month.

For instance, California employers are now prohibited from asking job applicants about past cannabis use, and most are barred from penalizing employees over lawful use of marijuana outside of the job.


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