Governor Newsom Proposes Consolidating Cannabis Licensing Entities

The California Bureau of Cannabis Control (BCC) on Friday announced a proposal by Governor Gavin Newsom that would consolidate the state’s three cannabis licensing entities into a single department.

Under Newsom’s proposal, in-house licensing entities at the Bureau of Cannabis Control, the Department of Food and Agriculture, and the Department of Public Health would be merged into the Department of Cannabis Control by July 2121.

The BCC says that, with the creation of a single point of contact for local governments and cannabis licensees, establishing a standalone department with an enforcement arm will centralize and align critical areas to build a successful legal cannabis market.

The Administration says that more details on the proposal will be revealed in the Spring of 2020.

Governor Newsom has also proposed a simplification of the cannabis tax administration by changing the point of collection, which would transfer the responsibility for cultivation excise tax from the final distributor to the first.

The retail excise tax would transfer from the distributor to the retailer as well under the proposal, which would eliminate the California Department of Tax and Fee Administration’s requirements of estimating mark-up on products and setting wholesale tax rates.

According to the BCC, the changes would reduce the cannabis industry’s tax collection burden and simplify the tax collection process.

The Newsom Administration, in consultation with stakeholders and others in the cannabis industry, will consider additional changes to the current tax structure, including the number of taxes and tax rates in an effort to simplify the system and support a “stronger, safer legal cannabis market.”