Los Angeles cannabis industry advocates call for drastic tax reductions

The Government Operations Committee meeting held on June 3, 2025, in Los Angeles addressed several key issues, primarily focusing on the taxation of the cannabis industry and budgetary matters concerning the General Services Department (GSD).

The meeting commenced with public comments, where speakers expressed significant concerns regarding the current tax structure for cannabis businesses in Los Angeles. One speaker highlighted that the cannabis industry is burdened by a 10% tax rate, which they argued is excessively high compared to the lower taxes imposed on alcohol and tobacco. They emphasized that this over-taxation has led to many legal dispensaries accumulating substantial debt, with the average dispensary reportedly over a million dollars in debt to the city. The speaker called for a reduction of cannabis taxes to below 1% to promote social equity and support struggling businesses.

Another speaker, Tiffany Wright, echoed these sentiments, describing the current tax and fee structure as predatory. She urged the council to reconsider the financial pressures placed on social equity licensees, arguing that the city must eliminate excessive fees and reduce taxes to foster a healthier business environment. Wright warned that failure to act could result in long-term negative consequences for the council members involved.

Following the public comments, the committee moved on to agenda items 2 and 3, which involved budget motions related to the GSD. The committee discussed amending the Mayor's proposed budget for 2025-2026 to restore funding and positions within the department. These budget adjustments are intended to be offset by reallocating funds from the sewer construction and maintenance fund and reducing the postage account.

The GSD representatives expressed gratitude for the committee's ongoing support, emphasizing the department's critical role in city operations and its impact on residents. The discussions on budgetary matters were referred to the Budget Finance Committee for further consideration.

In conclusion, the meeting highlighted pressing issues surrounding cannabis taxation and the importance of budgetary support for city services. The committee's discussions reflect ongoing efforts to address the financial challenges faced by cannabis businesses and ensure adequate funding for essential city departments. Further actions and decisions are anticipated as the committee continues to engage with these critical topics.