Fiona Ma for State Assembly
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Board Member Ma Brings Lessons Learned from Colorado Cannabis Conversations to California

For Immediate Release:                                                                        Contact: Lizette Mata

September 30, 2015                                                                                               916-591-2931

 

Board Member Ma Brings Lessons Learned from Colorado Cannabis Conversations to California

Sacramento—Last week, California State Board of Equalization (SBOE) Member Fiona Ma (District 2) led a fact-finding tour to Colorado to study Colorado’s effort to establish a comprehensive regulatory and taxation system for cannabis. Some of the tour highlights included meeting with government agencies like the Office of Marijuana Coordination, banks, tours of grow operations, manufacturers of cannabis-infused products, and live demonstrations of tracking systems used to record, report and enforce their restrictions on transportation and distribution of cannabis in-state.

“California has its work cut out for it,” stated Board Member Ma. “Based on the sheer scale and numbers involved with our current medicinal cannabis industry, it is clear that regardless of what other states are doing, California will be a game changer. It makes sense that more businesses would be paying their taxes if they had access to banks and credit unions.”

In 2014, California collected $44 million in sales taxes from only 25% of the Medical Cannabis Dispensaries (MCDs) who have active operations in the state.

Under Board Member Ma’s leadership, the Board of Equalization, which is already charged with collecting sales and use taxes for voter-approved medicinal cannabis operations in California, has been focusing closely on the existing industry and preparing for possible legalization of recreational use of cannabis in California in 2016.

Due to conflicting federal law, cannabis operations are virtually excluded from accessing banking services, meaning dispensaries are strictly-cash operations. With banks reluctant to take on the risk and responsibilities associated with accepting money earned from a substance that's still illegal under federal law, banking has become a rare and/or very costly luxury in the marijuana industry.

This cash-based system makes auditing and assessing the gross receipts of cannabis operations exceedingly difficult from a tax-collection standpoint, and means that the owners and operators of medicinal cannabis operations face a number of challenges; the first and foremost being public safety risks. Any business that has cash money on its premises runs a risk of becoming a target of theft.

Though Colorado has not yet reported any violent crimes associated with their cannabis industry, this may be in large part due to access to resources like safe transport and banking within the industry. California on the other hand, has a lot of ground to make up. While Colorado reports that about 75% of its cannabis industry has access to some sort of bank account, in California it is estimated that only 10% of the cannabis industry has access to banking.

Additional challenges include meeting payroll obligations for employees who often are paid in cash, as well as tax payments to their state and the federal government.

“Keeping an industry and our citizens from fully integrating into our tax system and our financial infrastructure is a lose-lose proposition,” stated Board Member Ma. “It makes no sense to allow industries the flexibility to set up shop, but not have access to the most basic of necessities like a bank account. This frustrating situation is forcing states to no longer ask permission, but instead, do whatever they can get away with within their legal rights.”

In addition to banking, transportation issues continue to be of great concern as California moves to implement the regulatory system established by legislation negotiated by the Legislature and Governor Brown. Board Member Ma will be convening a transportation-specific stakeholders meeting for medicinal cannabis which is tentatively scheduled for November 20, 2015.

To view Board Member Ma’s stakeholder meeting on banking issues within the cannabis industry held on July 31, 2015, please visit: https://www.youtube.com/watch?v=5JqFuFlgfaI

To read Board Member Ma’s Huffington Post article on banking the unbanked cannabis industry, please visit: http://www.huffingtonpost.com/fiona-ma/banking-the-unbanked-a-wi_b_7935762.html

To visit Board Member Ma’s website, please click here: http://www.boe.ca.gov/ma/

 

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The five-member California State Board of Equalization (BOE) is a publicly elected tax board. Established in 1879 by a constitutional amendment, the BOE was initially charged with responsibility for ensuring that county property tax assessment practices were equal and uniform throughout the state. Currently the tax programs administered by the BOE are concentrated in four general areas: sales and use taxes, property taxes, special taxes and the tax appellate program. The BOE collects $60 billion annually in taxes and fees supporting state and local government services. It hears business tax appeals, acts as the appellate body for franchise and personal income tax appeals, and serves a significant role in the assessment and administration of property taxes.  For more information on other taxes and fees in California, visitwww.taxes.ca.gov.

 

Fiona Ma represents close to 10 million people living in District Two on the State Board of Equalization. Her district includes the following 23 counties: Alameda, Colusa, Contra Costa, Del Norte, Glenn, Humboldt, Lake, Marin, Mendocino, Monterey, Napa, San Benito, San Francisco, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, Tehama, Trinity, and Yolo. 

For more information, please visit Board Member Ma’s website at: http://www.boe.ca.gov/ma/

 

 

State Board of Equalization • 450 N Street, Sacramento, CA 95814 • 1-800-400-7115

 

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Board Member Fiona Ma's Informational Tour to Denver, Colorado