California Hemp Legislation Speculated to Cause Major Fiscal Impact

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Aug 08, 2024, 17:29 ET

Proposed Bill Estimated to Cost $250 Million in State Sales Tax Revenue and Up to 41,000 Jobs

LOS ANGELES, Aug. 8, 2024 /PRNewswire/ -- In a blow to California's already strained budget deficit, Assembly Bill 2223 is projected to have a negative fiscal impact across sectors. The proposed legislation aims to monopolize the state's hemp market by granting exclusive full spectrum hemp retail control to marijuana dispensaries.

If passed unamended, AB 2223 will force the closure of California hemp retailers, jeopardizing approximately $250 million in sales tax revenues and 41,210 jobs, according to the 2023 National Cannabinoid Report by Whitney Economics, the most comprehensive analysis based on state-level data.

Chad Paydo, owner of Petaluma, Lafayette, and Concord Sunmed | Your CBD Store locations, stated, "Proponents of AB 2223 argue that any fiscal losses will be offset by increased sales at dispensaries. Since all of my stores are located where dispensaries are banned, this claim is simply false and misleading."

According to the California Department of Cannabis Control, 54% (289 out of 539) of cities and counties in California do not allow dispensaries. Of the 18 independently owned and operated Sunmed | Your CBD Store locations in the state, 15 are situated in areas where dispensaries are banned.

"Since October 2021, California Sunmed | Your CBD Store locations have generated an estimated $11.5 million in hemp CBD product sales and contributed approximately $410,000 in state taxes alone, creating hundreds of jobs," said Marcus Quinn, CEO of Sunmed | Your CBD Store. "Every one of these stores is expected to close if AB 2223 passes unamended."

Quinn continues, "Bad actors are already violating existing regulations. AB 2223 does nothing but monopolize the industry, causing economic concerns and punishing responsible businesses like ours that follow strict guidelines to keep consumers safe."

Historically, government enforcement against bad actors in California has been markedly insufficient. Concerns are mounting that the state may be underestimating the actual cost of enforcement necessary for AB 2223 to achieve its goals, as a comprehensive financial impact analysis has yet to be publicly released.

Without a publicly available plan for budget allocation, cost analysis, or oversight, AB 2223 appears to be a bill advancing through the legislative process with minimal scrutiny, raising serious concerns about its potential financial impact and effectiveness.

Sunmed | Your CBD Store supports existing regulations and advocates for increased funding for the California Department of Public Health (CDPH) to enhance its enforcement capabilities. An increased budget for CDPH, supported by an excise tax, could address existing deficiencies and ensure effective enforcement.

To prevent further financial loss for California residents and counteract monopolistic incentives in the state, Sunmed | Your CBD Store urges the community to oppose AB 2223 through social media advocacy and direct engagement with local politicians.

Contact

Patrick Shatzer
Sunmed | Your CBD Store
[email protected]

About Sunmed^™ | Your CBD Store^®

Sunmed | Your CBD Store, an affiliate of Sunflora, Inc., is the largest hemp retailer in the United States and the exclusive home of award-winning, hemp-derived Sunmed products. With 300+ nationwide locations across 42 states, the brand offers a premium in-store customer experience with access to 150+ nonpharmaceutical wellness formulas, including clinically proven sleep gummies, pain relief topicals, USDA-organic oil tinctures, and CBD for pets. Through in-store education, community involvement, and groundbreaking clinical research, Sunmed strives to empower modern wellness and enhance people's lives with natural science-backed products. Learn more at getsunmed.com

SOURCE Sunmed