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Several hundred California cannabis retailers, tired of the regulatory status quo and worried about an upcoming tax hike, have banded together to form yet another trade organization to lobby lawmakers in Sacramento, several of the organizers told Green Market Report this week.
The new trade organization, dubbed the California Cannabis Operators Association (CACOA), will be comprised of some of the largest names in the state’s marijuana trade, including:
Catalyst Cannabis Co.
Connected Cannabis Co.
Cookies
Culture Cannabis Club
Grupo Flor
Haven
Embarc
March and Ash
NUG
Off the Charts
Perfect Union
STIIIZY
Traditional Co.
TRP Co.
Gold Flora (Cboe Canada: GRAM) (OTCQB: GRAM)
CACOA will be led by longtime marijuana lobbyist Amy Jenkins, who for years was the tip of the spear in Sacramento for the California Cannabis Industry Association. Jenkins said she’s in the midst of transitioning away from CCIA to be the new executive director at CACOA.
Also leading the new organization as president will be Alex Freedman, the CEO of Traditional Co. and a former attorney with the city of Los Angeles’ Department of Cannabis Regulation.
The new group’s business members “provide legal access in over 80% of the jurisdictions where cannabis can be sold legally today and serve more than 50% of the state’s total population,” according to a press release. Members have “more than 200 storefronts across over 90 municipalities, serving over twenty million California residents.”
Although it’s primarily concerned with business issues faced by retailers, Jenkins said CACOA wants to collaborate with others up and down the supply chain, including other trade organizations, to get pro-cannabis reforms passed in the California Legislature. The CACOA joins other trade groups that have members trying to influence legislation, which apart from CCIA also includes the United Cannabis Business Association, the Origins Council, the California Cannabis Manufacturers Association and the Cannabis Distribution Association.
The new group says its top priorities include forestalling a planned tax hike that will go into effect July 1 this year and getting new regulations in place for intoxicating hemp goods, Jenkins said.
“We’re coming up on a potential tax increase that would be devastating to the retail sector,” Jenkins said, referring to a pending increase in the state cannabis excise tax rate to 19% from 15%. “The number one priority is trying to avert a tax hike.”
The second top issue for California retailers and other marijuana companies that are part of CACOA is getting permanent rules in place for intoxicating hemp goods, Jenkins said, an issue that lawmakers couldn’t agree on last year and which led to Gov. Gavin Newsom issuing emergency rules that essentially banned hemp goods with any THC in them.
While the hemp rules already have a proposed bill in the legislature – Assembly Bill 8, introduced by Member Cecilia Aguiar-Curry – the tax question is a trickier one. Typically, cannabis bills that get tied to the budget aren’t released until later in the year, around mid-May, Jenkins said. So it’ll take a few months of lobbying behind the scenes to get any solid legislative language that may cancel the upcoming tax hike.
But Jenkins and Freedman acknowledged that they likely have an uphill battle, politically speaking, to convince a majority of California lawmakers to reduce expected cannabis tax income at a time when the state is reeling from billions of dollars in damages due to the Los Angeles wildfires.
“The fires in Los Angeles, basically, it was a game changer in terms of the state’s fiscal health,” Jenkins said.
The argument to lawmakers, Jenkins said, will be simple: Unless the state calls off the upcoming tax hike, it’ll probably backfire, forcing many existing cannabis companies out of business and resulting in less actual tax income to state coffers.
Freedman said that CACOA’s debut took about 10 months of organizing behind the scenes and pulling various stakeholders together in a renewed effort to unify the long-fractured industry. He said it crystallized at a particular meeting last year with about 50 different operators discussing “our collective struggles.”
“Our biggest challenges, we now share. It’s not about competition at this point,” Freedman said. “This was really a lot of people with a lot of experience in the industry really working together to figure out how we’re all going to survive.”
“}]] The group said it represents more than 50% of the state’s total population and 80% of the jurisdictions where cannabis is sold legally. Read More
