Connect with us

Business

California cities, counties cut marijuana taxes to aid struggling companies

Published

on

An increasing number of county and local elected officials across California are acknowledging a longtime cannabis industry grievance – legal companies’ taxes are too high – and cutting local levies on retail sales, business operations or both.

At least 14 cities and counties in the state – including key consumer markets such as Los Angeles and San Francisco as well as less-populated, production-focused areas like Calaveras and Humboldt counties – have reduced or eliminated local sales, business or cultivation taxes over the past year, according to research compiled by Hirsh Jain of Ananda Strategy, a Los Angeles-based consultancy.

The trend reflects a growing acceptance among elected officials that legal marijuana in the state’s roughly $6 billion market is simply too expensive for California consumers who can patronize a still-thriving illicit market that regulators and law enforcement have been unable to punish out of existence.

Cannabis sales in California are subject to a 15% state excise tax as well as state sales taxes, which range from 7.25% to as high as 10.75% in some areas.

That’s on top of any local taxes that cities and counties might choose to impose.

The tax cuts are welcome but limited relief for a struggling industry desperate to stay afloat amid familiar pressures.

Advocates say the collapse this summer of Herbl, a major distributor alleged to have left a string of unpaid invoices across the state, is a sign of things to come unless major changes are made.

The tax cuts reflect a stark departure from the attitude in legalization’s early days, when local governments saw marijuana industry tax revenue as a new source of revenue to backfill budgets and avoid more difficult conversations around spending priorities.

But it’s also a demonstration that the help legal businesses say they need is more likely to come in the short to medium term from local lawmakers than at the state level.

“These local jurisdictions arguably need the revenue more than the state does,” Jain told MJBizDaily. “These cities are making practical decisions to preserve a struggling industry.

“That’s why it’s all the more disappointing the state’s not getting the memo.”

Cuts across the state

Among the cities that have cut taxes in the past year are:

  • Berkeley, where lawmakers voted in July to extend an across-the-board local tax exemption until 2025.
  • Cathedral City, which cut a retail tax from 10% to 5% and offered further cuts on cultivation and other business taxes.
  • Long Beach, which cut local taxes for social equity businesses and is offering further benefits for small companies that meet certain so-called “good employer” requirements.
  • Palm Desert, which cut a gross receipts tax on retailers from 10% to 5%.
  • San Francisco, which delayed imposing a local tax rate entirely.
  • Santa Ana, which cut taxes across the board.

Counties with recent cuts include:

  • Calaveras.
  • Humboldt.
  • Mendocino.
  • Monterey.
  • San Luis Obispo.
  • Sonoma.

‘Help people who are following the rules’

Upscale wineries and sprawling farms dot the hills in San Luis Obispo County on California’s Central Coast, a popular weekend-getaway destination where cannabis companies have struggled to find a solid foothold.

Part of the reason is that retail operations are banned in unincorporated areas of the county, which has been a “very arduous place for the cannabis industry to do business,” admitted county Supervisor Dawn Ortiz-Legg, who was elected in June 2022.

Another reason is a 2018 voter-approved law that imposed a gross-receipts tax on cannabis businesses that was scheduled to increase from 8% to 10% on July 1 – unless the county Board of Supervisors intervened.

Recognizing that cannabis is a “fledging” industry – which, as Ortiz-Legg described it, is “somewhat in freefall” – the board voted in late June to cut the gross-receipts tax on cannabis businesses to 6% instead.

“All industries when they first start out are on rocky roads at first,” she told MJBizDaily.

“I think it’s our responsibility to help people who are following the rules and paying bills. Instead of being penalized, they should be supported and helped.”

Ortiz-Legg said she pushed to cut taxes further, to as low as 4%.

“In my opinion, we really need to be helping them a lot more than we have,” she added.

“The harder we make it for legal participants, the easier we make for the (illicit) market.”

Taxes ‘one piece’ of the puzzle

Economists stress that high taxes are only one pressure point for legal marijuana businesses in the state, where much of Proposition 64 – the 2016 voter-approved legalization law – can be changed only at the ballot box.

For example, industry observers have long lamented how little retail capacity there is in a state as large as California, which encourages consumers to patronize illicit-market options – including illegal delivery services and stores.

A representative of the League of California Cities, or CalCities, one of the major statewide lobbies involved in crafting Prop 64, said the organization had no comment.

The influence of CalCities, observers say, helped enshrine the “doctrine” of local control in state law, meaning cities and counties can strictly zone or ban cannabis retail entirely.

However, even CalCities’ guide for local lawmakers on how to regulate cannabis warns against taxing marijuana too heavily.

“(T)he key is to strike a balance so that taxes are not so high that they deter operators from doing business legitimately and encourage them to continue in the illegal market.”

And skeptics point out that other states – chief among them Washington with its 37% effective tax rate when state and local levies are tallied – also have high taxes but don’t suffer the same problem as legal businesses in California.

In the Golden State, stiff regulations – including environmental-protection laws as well as a licensing process that can leave would-be growers or sellers paying expensive commercial rents for months or even years without any revenue coming in – are also “a really big deal for legal cannabis,” said Daniel Sumner, a distinguished professor at the University of California, Davis, where he chairs the school’s Cannabis Economics Group.

“It’s not like starting a dog-walking business.”

“People tend to emphasize taxes because it’s an easy thing. ‘Oh, reduce taxes from 15% to 10%,’” said Robin Goldstein, the UC Davis Cannabis Economics Group’s director, who with Sumner co-wrote a book-length study, “Can Legal Weed Win? The Blunt Realities of Cannabis Economics,” published last summer.

“But when you put all the taxes together, that’s one small piece of what’s making it hard for legal weed to compete with illegal weed,” he said.

Still, doing away with local taxes “is visible and easy,” Sumner added.

“And the biggest thing about cutting taxes is that it does show, to some degree, that local jurisdictions sort of get it.”

‘Regulate cannabis like kale’

Ultimately, Goldstein argues, if policymakers want legal marijuana to be successful, they would do well to follow models from other stable and profitable industries.

“One thing we talk about is regulating cannabis like kale,” he said.

“If you want your county or your city to have the best benefit of reaping benefits in terms of jobs, regulate the industry like you do other prosperous sectors of the economy – which is to say like a normal agricultural product.

“The idea that you have to set up a special system for cannabis, with special stores that can sell nothing else, on top of all this other stuff you’re piling on top of it, is really not learning from the lessons of what’s succeeded in other industries.”

Source: https://mjbizdaily.com/california-cities-counties-cut-cannabis-taxes/

Business

Jio’s 1,600-Satellite LEO Constellation Gets Technical Green Light

Published

on

By

Reliance Jio has crossed a significant milestone in its space connectivity ambitions after its proposal to deploy a Low Earth Orbit (LEO) satellite constellation of around 1,600 satellites received a positive technical assessment from the Indian National Space Promotion and Authorisation Centre (IN-SPACe).

The evaluation, conducted jointly by IN-SPACe, the Indian Space Research Organisation (ISRO), and the Wireless Planning and Coordination (WPC) wing of the Department of Telecommunications, reportedly concluded that Jio’s proposed system meets the required technical standards and is comparable to leading global satellite broadband networks.

India’s Indigenous LEO Satellite Vision

Under the proposal, Reliance Jio plans to deploy between 1,600 and 1,650 satellites in Low Earth Orbit at an altitude of around 650 kilometres.

The planned constellation is expected to provide high-speed satellite connectivity across India, with approximately 32 satellites visible from any location at a given time. The company aims to roll out the network within the next two to three years, subject to regulatory approvals.

According to industry estimates, the satellite system could deliver 4.5 to 5 terabits per second (Tbps) of total data capacity, making it one of the largest satellite broadband projects proposed in India.

The project is expected to require an investment of $10–15 billion (approximately ₹95,000 crore to ₹1.42 lakh crore), reflecting the scale of infrastructure needed for satellite manufacturing, launches, ground stations, and user terminals.

Regulatory Process Moves Forward

Following the successful technical review, the proposal is expected to move into the next phase of regulatory approvals.

The government may now assist Jio in securing orbital slots, coordinating spectrum usage, and filing applications with the International Telecommunication Union (ITU), the global body responsible for managing satellite orbit and frequency allocations.

Obtaining orbital rights remains a critical step, as Low Earth Orbit has become increasingly competitive due to the growing number of satellite broadband projects being planned worldwide.

Officials also indicated that the proposed satellite architecture has been designed to coexist with future Indian LEO constellations, allowing multiple domestic operators to share orbital resources efficiently.

Broadband, Mobile Connectivity, and Strategic Applications

Jio plans to use the satellite network to provide a range of communication services, including satellite broadband, mobile backhaul, enterprise connectivity, and direct-to-device (D2D) satellite communication, particularly in remote and underserved regions where conventional telecom infrastructure is limited.

The company also intends to establish 20 to 22 ground stations across India to support network operations.

Apart from commercial telecommunications, officials have highlighted the project’s potential strategic importance. A domestically developed satellite constellation could strengthen India’s communication infrastructure, reduce dependence on foreign satellite operators, and support national security requirements.

Reports suggest preliminary discussions are underway regarding the possibility of integrating defence-related payloads into some satellites, enabling both civilian and strategic use.

Major Step for India’s Space and Telecom Sectors

Industry analysts view the technical clearance as an important milestone in India’s expanding private space ecosystem. If Jio secures the remaining regulatory approvals and international orbital clearances, the project could become the country’s first large-scale indigenous LEO satellite broadband network.

The initiative also aligns with India’s broader efforts to expand digital connectivity while strengthening its presence in the global satellite communications market.

Continue Reading

Business

Alleged Crores Pharma Scam Mastermind Arrested from Surat

Published

on

By

After evading law enforcement for nearly 13 years, an accused linked to a large-scale pharmaceutical fraud case has been arrested by Delhi Police from Surat, Gujarat. The suspect is alleged to have orchestrated a series of financial scams involving fake identities, forged documents, and dishonoured cheques used to procure high-value pharmaceutical raw materials.

Authorities say the accused, identified as Himmat Singh Lodha, is believed to have defrauded multiple pharmaceutical companies in Delhi of goods worth approximately ₹98 lakh before disappearing and remaining underground for years.

Fake Business Deals and Dishonoured Cheques Used in Fraud

Investigators claim the accused posed as a legitimate pharmaceutical trader and placed bulk orders for expensive drug ingredients, offering post-dated cheques as payment security.

In one documented case from 2013, he allegedly obtained around 550 kilograms of Gliclazide, a diabetes-related pharmaceutical ingredient, valued at over ₹26 lakh. When suppliers attempted to encash the cheques, they were reportedly returned with the remark “account closed.”

Following the transaction, the accused allegedly vacated his office and rented residence and disappeared without settling payments. He was later declared a proclaimed offender in 2016 after repeatedly failing to appear before court proceedings. Authorities had also issued a reward for information leading to his arrest.

Multiple Identities and Repeated Fraud Pattern

Police investigations further link the accused to another cheating case dating back to 2012, where he allegedly used a fake identity, “Kailash Jain,” to obtain a large consignment of Ambroxol HCL, a pharmaceutical compound used in cough medications. The value of that consignment was estimated at around ₹72 lakh.

Officials believe the accused followed a consistent modus operandi—posing as a credible businessman, securing high-value goods on deferred payment terms, and then disappearing after delivery while shutting down business operations.

Investigators suspect that forged business records, fake company credentials, and fabricated financial histories were used to build trust with suppliers and gain access to expensive raw materials.

Multi-State Surveillance Leads to Arrest in Surat

A special Crime Branch team tracked the accused through coordinated surveillance efforts across multiple cities, including Mumbai, Ahmedabad, and Surat. After nearly a month of technical monitoring and intelligence gathering, officials located and arrested him from a residential area in Surat.

Authorities also revealed that the accused had been involved in property-related activities while staying under the radar to avoid detection.

Growing Threat of Corporate Identity Fraud

The case highlights a rising trend of organised financial fraud targeting industries that rely heavily on trust-based transactions and deferred payments. Experts note that criminals increasingly exploit gaps in corporate verification systems by using fake GST registrations, temporary offices, and forged documentation to appear legitimate.

Cybercrime and financial fraud specialists warn that such schemes are becoming more complex with the widespread availability of digital business tools, making it easier to create convincing but fraudulent corporate identities.

Experts Urge Stronger Due Diligence in High-Value Transactions

Experts, including former IPS officer and cybercrime specialist Prof. Triveni Singh, emphasize the need for stricter verification procedures in commercial dealings. He noted that relying solely on paperwork or digital business profiles can expose companies to significant financial risk.

Authorities and industry experts recommend physical verification of business operations, bank account validation, and detailed background checks before engaging in high-value or deferred-payment transactions—particularly in sectors like pharmaceuticals, where single consignments can involve transactions worth crores.

Continue Reading

Business

EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices

Published

on

By

A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.

Investigation Under Digital Markets Act Gains Momentum

The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.

Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.

Industry Groups Demand Swift Action

Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.

Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.

In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.

Google Denies Allegations

Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.

However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.

Potential Billion-Euro Penalties

If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.

Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.

Wider Implications for Big Tech

The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.

A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.

As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.

Continue Reading

Trending

Copyright © 2022 420 Reports Marijuana News & Information Website | Reefer News | Cannabis News