This transcript has been auto-generated and may contain technological errors.
1
00:00:09,120 --> 00:00:13,480
welcome I'm your host Hilary Bricken and
2
00:00:11,360 --> 00:00:15,599
this is the Cannabis law Now podcast
3
00:00:13,480 --> 00:00:17,359
where we regularly discuss issues
4
00:00:15,599 --> 00:00:19,400
related to the Cannabis industry
5
00:00:17,359 --> 00:00:22,080
including investment day-to-day
6
00:00:19,400 --> 00:00:24,119
operational issues and potential reform
7
00:00:22,080 --> 00:00:26,000
on the horizon that will impact all
8
00:00:24,119 --> 00:00:28,359
cannabis businesses and investors in the
9
00:00:26,000 --> 00:00:28,359
United
10
00:00:28,960 --> 00:00:34,399
States hey everybody glad you're here
11
00:00:31,640 --> 00:00:37,079
with us today on the podcast um I have a
12
00:00:34,399 --> 00:00:38,920
guest who I consider to be a friend and
13
00:00:37,079 --> 00:00:41,600
a colleague and he's one of these people
14
00:00:38,920 --> 00:00:43,360
who I check in with to see what the heck
15
00:00:41,600 --> 00:00:45,559
is going on boots on the ground in
16
00:00:43,360 --> 00:00:47,440
California because it's so chaotic when
17
00:00:45,559 --> 00:00:49,480
it comes to California Cannabis if
18
00:00:47,440 --> 00:00:51,160
you've been in that market and we have
19
00:00:49,480 --> 00:00:53,480
the privilege today of having a
20
00:00:51,160 --> 00:00:55,879
conversation with Anthony Almaz who is
21
00:00:53,480 --> 00:00:58,640
the general Council of catalyst cannabis
22
00:00:55,879 --> 00:01:01,280
in California and Catalyst really is a
23
00:00:58,640 --> 00:01:03,640
force of nature they have 26
24
00:01:01,280 --> 00:01:06,760
dispensaries in the Golden State which I
25
00:01:03,640 --> 00:01:10,200
can say personally is no small feat to
26
00:01:06,760 --> 00:01:12,200
get those licenses and survive and
27
00:01:10,200 --> 00:01:13,920
succeed but the reason why I have
28
00:01:12,200 --> 00:01:15,880
Anthony on today is not to talk about
29
00:01:13,920 --> 00:01:17,720
how great catalyst is although they are
30
00:01:15,880 --> 00:01:19,479
great it's actually to talk about a
31
00:01:17,720 --> 00:01:21,439
challenge a specific legal challenge
32
00:01:19,479 --> 00:01:23,640
that Catalyst has with the California
33
00:01:21,439 --> 00:01:26,040
Department of tax and fee Administration
34
00:01:23,640 --> 00:01:28,520
and normally when I say tax or Revenue
35
00:01:26,040 --> 00:01:30,439
people's eyes just immediately glaze
36
00:01:28,520 --> 00:01:32,000
over and some of that is warant because
37
00:01:30,439 --> 00:01:33,840
it is a dry topic and Anthony would
38
00:01:32,000 --> 00:01:36,520
probably agree with me on tax but the
39
00:01:33,840 --> 00:01:39,159
reason why this challenge is important
40
00:01:36,520 --> 00:01:41,399
because we have some very interesting
41
00:01:39,159 --> 00:01:44,000
administrative legal moves being made by
42
00:01:41,399 --> 00:01:46,600
a California agency that if they do go
43
00:01:44,000 --> 00:01:49,240
through they will have an incredible
44
00:01:46,600 --> 00:01:51,119
impact not in the good way in my opinion
45
00:01:49,240 --> 00:01:52,759
on the entire California Cannabis
46
00:01:51,119 --> 00:01:54,840
industry and other states may actually
47
00:01:52,759 --> 00:01:57,000
look to the model to see if they can
48
00:01:54,840 --> 00:01:58,680
generate even more revenue on the backs
49
00:01:57,000 --> 00:02:00,280
of cannabis businesses and the cool
50
00:01:58,680 --> 00:02:03,520
thing about Anthony is that Anthony is
51
00:02:00,280 --> 00:02:06,439
not just a GC utility player he has a
52
00:02:03,520 --> 00:02:08,280
tax background and a tax llm so he very
53
00:02:06,439 --> 00:02:10,599
much knows what he's talking about
54
00:02:08,280 --> 00:02:12,360
welcome to the show Anthony thank you
55
00:02:10,599 --> 00:02:14,680
thank you Hillary great to be on I
56
00:02:12,360 --> 00:02:16,480
appreciate you inviting me yes very good
57
00:02:14,680 --> 00:02:18,640
okay so let's just jump right into it
58
00:02:16,480 --> 00:02:20,239
because I think that this case deserves
59
00:02:18,640 --> 00:02:22,360
way more attention than it's getting and
60
00:02:20,239 --> 00:02:24,519
it seems to just be starting to pick up
61
00:02:22,360 --> 00:02:26,440
some visibility within media within
62
00:02:24,519 --> 00:02:29,360
circles in California Cannabis as people
63
00:02:26,440 --> 00:02:31,760
wake up to what cdtfa is doing so can
64
00:02:29,360 --> 00:02:35,160
you tell me kind of the main facts
65
00:02:31,760 --> 00:02:37,040
behind catalyst's challenge to cdtfa
66
00:02:35,160 --> 00:02:38,959
yeah absolutely and I think again this
67
00:02:37,040 --> 00:02:40,599
is a very intense legal topic I'm going
68
00:02:38,959 --> 00:02:42,519
to try to keep a high level as much as
69
00:02:40,599 --> 00:02:44,440
possible but I think the big thing to
70
00:02:42,519 --> 00:02:46,519
start off with is kind of just what's
71
00:02:44,440 --> 00:02:48,480
this statutory framework that we're
72
00:02:46,519 --> 00:02:50,560
dealing with here right and at a high
73
00:02:48,480 --> 00:02:53,239
level it's really attacking what's
74
00:02:50,560 --> 00:02:55,640
taxable in California first and foremost
75
00:02:53,239 --> 00:02:57,319
and so for those who are in the industry
76
00:02:55,640 --> 00:02:59,000
here they know that when you read the
77
00:02:57,319 --> 00:03:01,599
tax code it's simple there's three
78
00:02:59,000 --> 00:03:03,319
definitions cannabis cannabis products
79
00:03:01,599 --> 00:03:05,480
and cannabis accessories three different
80
00:03:03,319 --> 00:03:07,080
things and so everybody in this industry
81
00:03:05,480 --> 00:03:08,680
knows that cannabis and cannabis
82
00:03:07,080 --> 00:03:10,519
products are everything that comes
83
00:03:08,680 --> 00:03:12,720
through the pl and cannabis accessories
84
00:03:10,519 --> 00:03:15,120
is everything that touches you know a
85
00:03:12,720 --> 00:03:17,319
sold good like a cart or anything like
86
00:03:15,120 --> 00:03:18,760
that all the plastic all the Machinery
87
00:03:17,319 --> 00:03:20,440
all the packaging that is what's
88
00:03:18,760 --> 00:03:22,319
cannabis accessories and so there's
89
00:03:20,440 --> 00:03:25,159
always been an understanding in the
90
00:03:22,319 --> 00:03:28,319
industry that only the portion of that
91
00:03:25,159 --> 00:03:31,000
product that is from the plant directly
92
00:03:28,319 --> 00:03:33,439
is taxable at the 15% rate that
93
00:03:31,000 --> 00:03:36,000
California imposes for the last 6 years
94
00:03:33,439 --> 00:03:38,200
it's been held that way even cdtfa came
95
00:03:36,000 --> 00:03:40,040
out and said it in the regulations that
96
00:03:38,200 --> 00:03:41,920
only cannabis and cannabis products are
97
00:03:40,040 --> 00:03:44,280
subject to the 15% tax there's
98
00:03:41,920 --> 00:03:47,000
regulation 3700 we don't have to get
99
00:03:44,280 --> 00:03:49,200
into the specific details they said if
100
00:03:47,000 --> 00:03:51,120
you separately State the Cannabis
101
00:03:49,200 --> 00:03:53,879
accessories then you don't have to
102
00:03:51,120 --> 00:03:56,560
charge 15% tax which is a huge deal this
103
00:03:53,879 --> 00:03:58,519
is what it's all about so we've been in
104
00:03:56,560 --> 00:03:59,920
that process we've applied the cdtfa
105
00:03:58,519 --> 00:04:01,400
regulations we've been able able to
106
00:03:59,920 --> 00:04:02,920
separately State the Cannabis
107
00:04:01,400 --> 00:04:05,599
accessories from the Cannabis and
108
00:04:02,920 --> 00:04:08,000
cannabis product and significantly save
109
00:04:05,599 --> 00:04:10,439
the cons the consumer on the excise tax
110
00:04:08,000 --> 00:04:12,840
for that reason and so what ended up
111
00:04:10,439 --> 00:04:16,000
happening we did it and then once the
112
00:04:12,840 --> 00:04:17,720
CFA kept caught on on what we were doing
113
00:04:16,000 --> 00:04:19,799
they uh they didn't like it for the most
114
00:04:17,720 --> 00:04:22,280
part and so what they did was started
115
00:04:19,799 --> 00:04:24,800
the rul making process to change how
116
00:04:22,280 --> 00:04:26,639
that applied for the retailers and so
117
00:04:24,800 --> 00:04:29,199
they issued a discussion paper which is
118
00:04:26,639 --> 00:04:31,479
the beginning of the rul making process
119
00:04:29,199 --> 00:04:33,960
telling the industry we want to change
120
00:04:31,479 --> 00:04:35,199
the rules we we think you're confused
121
00:04:33,960 --> 00:04:37,280
that's that's actually what they put in
122
00:04:35,199 --> 00:04:40,080
the discussion paper they said we you're
123
00:04:37,280 --> 00:04:42,000
actually confused um that is not what
124
00:04:40,080 --> 00:04:43,880
it's supposed to be this is what the
125
00:04:42,000 --> 00:04:45,440
statute says and it doesn't say anything
126
00:04:43,880 --> 00:04:47,240
what it's supposed to say so here's an
127
00:04:45,440 --> 00:04:49,639
explanation of the new proposed
128
00:04:47,240 --> 00:04:52,160
regulations the Cannabis excise tax
129
00:04:49,639 --> 00:04:54,840
applies on almost all retail sales we're
130
00:04:52,160 --> 00:04:56,840
also going to codify the tax on tax
131
00:04:54,840 --> 00:04:58,759
feature I'm sure you're familiar with
132
00:04:56,840 --> 00:05:00,639
from your clients is where you compound
133
00:04:58,759 --> 00:05:02,720
the tax or the local all the way to the
134
00:05:00,639 --> 00:05:04,560
excise tax all the way to the sales tax
135
00:05:02,720 --> 00:05:06,400
we're going to try to codify that into a
136
00:05:04,560 --> 00:05:08,600
regulation we're going to try to tax you
137
00:05:06,400 --> 00:05:10,320
on your services that you provide to
138
00:05:08,600 --> 00:05:12,039
your customers which is not a sales and
139
00:05:10,320 --> 00:05:14,280
use tax issue which is not a cannabis
140
00:05:12,039 --> 00:05:16,440
excise tax issue and so when they sent
141
00:05:14,280 --> 00:05:18,840
that out to the industry which is the
142
00:05:16,440 --> 00:05:20,680
first part everybody went crazy we
143
00:05:18,840 --> 00:05:22,600
jumped on the interested parties meeting
144
00:05:20,680 --> 00:05:24,080
we told them this is crazy this is not
145
00:05:22,600 --> 00:05:26,199
what this the rule says you're doing
146
00:05:24,080 --> 00:05:27,720
this as an emergency regulation we don't
147
00:05:26,199 --> 00:05:29,680
understand what's happening we s written
148
00:05:27,720 --> 00:05:31,000
comments we we told them this is far far
149
00:05:29,680 --> 00:05:33,240
beyond your Authority you're off the
150
00:05:31,000 --> 00:05:35,160
rail so that was back in October after
151
00:05:33,240 --> 00:05:38,600
we submitted our comments after we had
152
00:05:35,160 --> 00:05:41,319
that conversation with cdtfa in December
153
00:05:38,600 --> 00:05:43,479
they issued the notice of proposed
154
00:05:41,319 --> 00:05:45,280
rulemaking process right which is the
155
00:05:43,479 --> 00:05:48,160
official beginning of creating a new
156
00:05:45,280 --> 00:05:50,400
regulation what that starts is they will
157
00:05:48,160 --> 00:05:52,400
submit the proposed regulation to the
158
00:05:50,400 --> 00:05:54,400
oal which is the office of
159
00:05:52,400 --> 00:05:56,440
administrative law which is the agency
160
00:05:54,400 --> 00:05:58,600
task with reviewing these regulations
161
00:05:56,440 --> 00:06:00,319
and approving them under the APA or the
162
00:05:58,600 --> 00:06:02,840
administrative procedures what they did
163
00:06:00,319 --> 00:06:04,759
was they submitted a a diluted version
164
00:06:02,840 --> 00:06:06,080
of what they first told us about right
165
00:06:04,759 --> 00:06:08,080
after we told them we didn't like what
166
00:06:06,080 --> 00:06:10,160
this was you were trying to put into
167
00:06:08,080 --> 00:06:12,039
place uh regulations that you had no
168
00:06:10,160 --> 00:06:13,520
authority to put in they took out a lot
169
00:06:12,039 --> 00:06:14,960
of that stuff they took out the tax on
170
00:06:13,520 --> 00:06:16,520
tax because they're like oh we really
171
00:06:14,960 --> 00:06:18,360
don't have the authority to do that they
172
00:06:16,520 --> 00:06:20,080
took out a lot of the service language
173
00:06:18,360 --> 00:06:23,360
that they put in there and they proposed
174
00:06:20,080 --> 00:06:25,680
this diluted version of Regulation 3802
175
00:06:23,360 --> 00:06:27,560
and submitted it without additional
176
00:06:25,680 --> 00:06:29,479
input we this is the first time we saw
177
00:06:27,560 --> 00:06:31,720
the new updated rules and they submitted
178
00:06:29,479 --> 00:06:34,319
to the oal so because it's an emergency
179
00:06:31,720 --> 00:06:36,960
regulation we only had 5 days to reach
180
00:06:34,319 --> 00:06:38,120
out to the O and tell them hey these are
181
00:06:36,960 --> 00:06:41,039
the things that are wrong with this
182
00:06:38,120 --> 00:06:43,160
regulation here's a dozen reasons why so
183
00:06:41,039 --> 00:06:45,479
we submitted to the oal our written
184
00:06:43,160 --> 00:06:48,280
comment which was on December 11th and
185
00:06:45,479 --> 00:06:51,120
the oal only had five days to review and
186
00:06:48,280 --> 00:06:53,560
reject or approve the regulation right
187
00:06:51,120 --> 00:06:55,400
so again this is regulation 30802 we
188
00:06:53,560 --> 00:06:57,599
submitted it to the oal we said here's a
189
00:06:55,400 --> 00:07:00,240
dozen reasons why under the APA
190
00:06:57,599 --> 00:07:02,960
regulation 3802 should not be approved
191
00:07:00,240 --> 00:07:05,160
and the O's job is to disapprove if they
192
00:07:02,960 --> 00:07:07,759
find any one of those in violation of
193
00:07:05,160 --> 00:07:09,599
the APA then on December 15th which was
194
00:07:07,759 --> 00:07:11,039
the last day of review for the O we
195
00:07:09,599 --> 00:07:12,479
reached out to them said hey what
196
00:07:11,039 --> 00:07:14,199
happened with the regulation did it
197
00:07:12,479 --> 00:07:16,639
passed did it not passed they said oh we
198
00:07:14,199 --> 00:07:19,199
approved it and we approved an amendment
199
00:07:16,639 --> 00:07:21,160
to 3700 and this is where we Ste back we
200
00:07:19,199 --> 00:07:23,639
said had you approve an amendment to
201
00:07:21,160 --> 00:07:26,280
3700 we even know that was on the table
202
00:07:23,639 --> 00:07:28,599
here 3700 is what we're depending on for
203
00:07:26,280 --> 00:07:30,639
the move so how did you guys approve
204
00:07:28,599 --> 00:07:32,360
that this is crazy I never heard of this
205
00:07:30,639 --> 00:07:35,080
no response to that so then we submitted
206
00:07:32,360 --> 00:07:37,199
a a public records act request to see
207
00:07:35,080 --> 00:07:39,080
what was the conversation between you
208
00:07:37,199 --> 00:07:41,160
and the cdtfa regarding these
209
00:07:39,080 --> 00:07:43,400
regulations what did you guys do how did
210
00:07:41,160 --> 00:07:46,759
the 3700 even come into the equation and
211
00:07:43,400 --> 00:07:48,400
so the oal sent back all the emails of
212
00:07:46,759 --> 00:07:50,720
the communications between them and we
213
00:07:48,400 --> 00:07:52,680
were beside ourselves we saw the cdfa
214
00:07:50,720 --> 00:07:55,599
and O communicating with each other in
215
00:07:52,680 --> 00:07:58,159
response to our comment that the oal
216
00:07:55,599 --> 00:08:00,039
told the cdtfa that the regulations you
217
00:07:58,159 --> 00:08:01,840
submitted do not mean
218
00:08:00,039 --> 00:08:03,319
uh what's called The Clarity standard
219
00:08:01,840 --> 00:08:05,360
which is one of the six substance of
220
00:08:03,319 --> 00:08:07,960
standards that a regulation has to meet
221
00:08:05,360 --> 00:08:10,159
and that as submitted it cannot be
222
00:08:07,960 --> 00:08:12,120
approved you have to either withdraw it
223
00:08:10,159 --> 00:08:14,240
entirely and resubmit or essentially
224
00:08:12,120 --> 00:08:15,319
just give up on it altogether cdtfa
225
00:08:14,240 --> 00:08:17,520
nobody El that are working with each
226
00:08:15,319 --> 00:08:20,000
other over the next you know couple days
227
00:08:17,520 --> 00:08:22,280
says oh how about this language does
228
00:08:20,000 --> 00:08:24,560
this language work oh how about 3700 if
229
00:08:22,280 --> 00:08:26,840
we add this so between the between the
230
00:08:24,560 --> 00:08:29,000
two agencies they started working on
231
00:08:26,840 --> 00:08:31,599
changing the provisions of the language
232
00:08:29,000 --> 00:08:34,640
behind closed doors and then on the last
233
00:08:31,599 --> 00:08:36,519
day the oal said this should work for us
234
00:08:34,640 --> 00:08:38,760
so they switched out the ru making file
235
00:08:36,519 --> 00:08:41,560
never told the public so not only did
236
00:08:38,760 --> 00:08:44,480
they amend 3700 and the provisions of
237
00:08:41,560 --> 00:08:46,160
the regulation they also amended 3802
238
00:08:44,480 --> 00:08:48,200
some of the language in there without
239
00:08:46,160 --> 00:08:50,120
ever telling us and they went and said
240
00:08:48,200 --> 00:08:52,240
sent submitted to the Secretary of State
241
00:08:50,120 --> 00:08:54,160
for approval that was the first time it
242
00:08:52,240 --> 00:08:57,000
wasn't until the pr request did we
243
00:08:54,160 --> 00:08:59,519
realize at 3802 what was submitted to us
244
00:08:57,000 --> 00:09:01,040
was not even what was approved and so
245
00:08:59,519 --> 00:09:03,600
that's what's Happening Here and Now
246
00:09:01,040 --> 00:09:05,279
that's what we're challenging wow okay
247
00:09:03,600 --> 00:09:07,760
you know part of my practice is
248
00:09:05,279 --> 00:09:10,000
Regulatory Compliance understanding the
249
00:09:07,760 --> 00:09:11,880
regulations knowing how the regulations
250
00:09:10,000 --> 00:09:13,440
come to be and obviously under the
251
00:09:11,880 --> 00:09:15,360
administrative procedure act which all
252
00:09:13,440 --> 00:09:17,560
states have it it's a smaller version
253
00:09:15,360 --> 00:09:20,440
right of what we have federally right
254
00:09:17,560 --> 00:09:22,519
there's a whole blueprint for how the
255
00:09:20,440 --> 00:09:25,600
government is supposed to get a rule to
256
00:09:22,519 --> 00:09:27,720
Market essentially with the input of the
257
00:09:25,600 --> 00:09:29,640
public so number one let's talk about
258
00:09:27,720 --> 00:09:32,680
the emergency nature of these
259
00:09:29,640 --> 00:09:36,399
regulations how are these remotely
260
00:09:32,680 --> 00:09:38,640
emergency regulations and how can cdtfa
261
00:09:36,399 --> 00:09:39,880
try to adopt things in this maybe and
262
00:09:38,640 --> 00:09:41,480
you know maybe that's the heart of it
263
00:09:39,880 --> 00:09:43,519
that they can't they cannot do it this
264
00:09:41,480 --> 00:09:45,480
way that's a great question it's a great
265
00:09:43,519 --> 00:09:47,000
point right so it is our opinion that
266
00:09:45,480 --> 00:09:48,519
this is not an emergency right what
267
00:09:47,000 --> 00:09:50,600
they're doing here this is just them
268
00:09:48,519 --> 00:09:53,440
trying to clarify statutes now every
269
00:09:50,600 --> 00:09:55,519
agency has some discretion and prating
270
00:09:53,440 --> 00:09:57,320
regulation right so everybody knows
271
00:09:55,519 --> 00:09:59,800
legislature can't think of everything
272
00:09:57,320 --> 00:10:01,480
agencies are there to manage those rules
273
00:09:59,800 --> 00:10:03,040
look at the statutes and say okay this
274
00:10:01,480 --> 00:10:04,519
is what we think of them for the most
275
00:10:03,040 --> 00:10:07,120
part and they'll make a regulation out
276
00:10:04,519 --> 00:10:08,320
of it the APA which is the
277
00:10:07,120 --> 00:10:10,760
administrative procedures act
278
00:10:08,320 --> 00:10:12,519
California's version of how the process
279
00:10:10,760 --> 00:10:15,600
and procedure of bacing a regulation
280
00:10:12,519 --> 00:10:17,800
does have a diluted version for
281
00:10:15,600 --> 00:10:19,680
emergency regulations right they say in
282
00:10:17,800 --> 00:10:20,720
the event of an actual emergency we're
283
00:10:19,680 --> 00:10:22,279
going to break down some of these
284
00:10:20,720 --> 00:10:24,560
barriers you're still going to have to
285
00:10:22,279 --> 00:10:26,399
meet some procedural requirements but
286
00:10:24,560 --> 00:10:28,800
we're not going to make it so difficult
287
00:10:26,399 --> 00:10:30,959
so we can't take Swift government action
288
00:10:28,800 --> 00:10:33,120
now the APA you still have to prove it's
289
00:10:30,959 --> 00:10:35,000
an emergency right an actual one that's
290
00:10:33,120 --> 00:10:37,480
for the public uh good or for the public
291
00:10:35,000 --> 00:10:39,480
need or to avoid a serious public harm
292
00:10:37,480 --> 00:10:41,720
and with those emergencies the
293
00:10:39,480 --> 00:10:44,600
regulation is only supposed to be around
294
00:10:41,720 --> 00:10:46,639
for 180 days right so it's a temporary
295
00:10:44,600 --> 00:10:49,040
action it's only there for 180 days and
296
00:10:46,639 --> 00:10:51,000
at the end of the 180 days the agency is
297
00:10:49,040 --> 00:10:53,120
supposed to do the same process of
298
00:10:51,000 --> 00:10:56,360
passing a permanent regulation right
299
00:10:53,120 --> 00:10:59,959
that's typically the case now when AB
300
00:10:56,360 --> 00:11:01,320
195 was passed back in June 2022 I
301
00:10:59,959 --> 00:11:03,760
believe that was that made some
302
00:11:01,320 --> 00:11:06,240
significant changes in the excise tax
303
00:11:03,760 --> 00:11:08,079
the Cannabis tax law that shifted the
304
00:11:06,240 --> 00:11:10,079
collection of remittance from the
305
00:11:08,079 --> 00:11:12,000
distributor back to the retailer right
306
00:11:10,079 --> 00:11:14,560
and so when they passed that the
307
00:11:12,000 --> 00:11:16,440
legislature did Grant the cdtfa
308
00:11:14,560 --> 00:11:18,760
emergency Ru making Authority which the
309
00:11:16,440 --> 00:11:21,200
language says that the oal is supposed
310
00:11:18,760 --> 00:11:23,440
to treat this as immediately necessary
311
00:11:21,200 --> 00:11:25,680
to avoid public harm right and so with
312
00:11:23,440 --> 00:11:27,519
that language the O was supposed to
313
00:11:25,680 --> 00:11:29,959
consider it as an emergency for the most
314
00:11:27,519 --> 00:11:33,160
part now when you look the reason for
315
00:11:29,959 --> 00:11:35,079
that is that most likely and in my
316
00:11:33,160 --> 00:11:36,519
opinion the legislator is saying hey we
317
00:11:35,079 --> 00:11:38,839
know we're switching things up if you
318
00:11:36,519 --> 00:11:40,600
need to pass regulations to change forms
319
00:11:38,839 --> 00:11:42,680
to change the process of collection and
320
00:11:40,600 --> 00:11:45,320
remitting it you know to create a
321
00:11:42,680 --> 00:11:47,360
numbers or or excise tax numbers for the
322
00:11:45,320 --> 00:11:49,440
retailer to start collecting Orting the
323
00:11:47,360 --> 00:11:51,120
excise tax let's not avoid it we're
324
00:11:49,440 --> 00:11:53,160
going to give you this power for a year
325
00:11:51,120 --> 00:11:54,600
go create your regulations and pass it
326
00:11:53,160 --> 00:11:57,639
out there now this is only supposed to
327
00:11:54,600 --> 00:11:59,079
last for a year right so December 31st
328
00:11:57,639 --> 00:12:00,480
2023 was the last day that they're
329
00:11:59,079 --> 00:12:03,639
allowed to promulgate these emergency
330
00:12:00,480 --> 00:12:06,639
regulations but even if you have that
331
00:12:03,639 --> 00:12:08,920
legislative Authority you still have to
332
00:12:06,639 --> 00:12:11,399
provide facts of why this is important
333
00:12:08,920 --> 00:12:12,920
you can't just point to the statute and
334
00:12:11,399 --> 00:12:14,320
say the oal you're supposed to treat
335
00:12:12,920 --> 00:12:16,560
this as an emergency so therefore it's
336
00:12:14,320 --> 00:12:18,440
an emergency that's not how the APA
337
00:12:16,560 --> 00:12:20,120
works not from my understanding at the
338
00:12:18,440 --> 00:12:22,320
very least you're still supposed to put
339
00:12:20,120 --> 00:12:24,560
some facts of why we need to do it this
340
00:12:22,320 --> 00:12:27,279
way and why we don't have to go through
341
00:12:24,560 --> 00:12:29,720
the ordinary rul making process right
342
00:12:27,279 --> 00:12:32,040
had the cdtfa said well we're we're
343
00:12:29,720 --> 00:12:33,880
issuing these new forms for to help
344
00:12:32,040 --> 00:12:35,680
retailers collect and remit the excise
345
00:12:33,880 --> 00:12:37,600
tax that's one thing because you can say
346
00:12:35,680 --> 00:12:39,160
we're moving forward the retailer
347
00:12:37,600 --> 00:12:40,880
doesn't know how to collect and remit it
348
00:12:39,160 --> 00:12:42,279
we have to provide some regulations
349
00:12:40,880 --> 00:12:43,680
that's that's one thing we can
350
00:12:42,279 --> 00:12:45,399
understand that but there's a difference
351
00:12:43,680 --> 00:12:47,639
between that and an entirely
352
00:12:45,399 --> 00:12:49,680
interpretive regulation which is very
353
00:12:47,639 --> 00:12:52,720
discretionary it's not an emergency to
354
00:12:49,680 --> 00:12:54,360
clarify confusion in the industry on the
355
00:12:52,720 --> 00:12:56,279
interpretation of the statute that's
356
00:12:54,360 --> 00:12:57,880
what all regulations are you're there to
357
00:12:56,279 --> 00:13:00,839
help people understand what the statute
358
00:12:57,880 --> 00:13:03,160
means so to to use your emergency Ru
359
00:13:00,839 --> 00:13:05,519
making Authority just to try to
360
00:13:03,160 --> 00:13:07,320
interpret a statute and to give some
361
00:13:05,519 --> 00:13:09,240
sort of guidance to an industry is not
362
00:13:07,320 --> 00:13:11,839
an actual emergency and certainly not
363
00:13:09,240 --> 00:13:13,199
one the legislature intended or when
364
00:13:11,839 --> 00:13:14,959
they gave you that power for a whole
365
00:13:13,199 --> 00:13:17,040
year and that's the issue we're dealing
366
00:13:14,959 --> 00:13:19,079
with and if you're going to use that you
367
00:13:17,040 --> 00:13:20,880
have to explain what you have to explain
368
00:13:19,079 --> 00:13:22,560
what the emergency is you can't just
369
00:13:20,880 --> 00:13:24,560
point to the statute and say they gave
370
00:13:22,560 --> 00:13:26,000
us as power so we're used and it's just
371
00:13:24,560 --> 00:13:29,800
common sense at that point if you're G
372
00:13:26,000 --> 00:13:31,519
to tell us and so yes go for
373
00:13:29,800 --> 00:13:33,800
oh no I didn't mean to interrupt but to
374
00:13:31,519 --> 00:13:35,600
summarize in a way because I'm not a tax
375
00:13:33,800 --> 00:13:39,920
practitioner a lot of our listeners are
376
00:13:35,600 --> 00:13:44,360
not assembly Bill one was it 95 or 195
377
00:13:39,920 --> 00:13:47,600
195 AB 195 yeah assembly Bill 195 passes
378
00:13:44,360 --> 00:13:49,639
and it's this tax technical tax fix Bill
379
00:13:47,600 --> 00:13:52,240
and kind of overall to the California
380
00:13:49,639 --> 00:13:54,959
Cannabis tax system part of that bill
381
00:13:52,240 --> 00:13:56,959
vested cdtfa with this emergency role
382
00:13:54,959 --> 00:13:59,440
making Authority which is this hurried
383
00:13:56,959 --> 00:14:01,959
up due process procedure of of these
384
00:13:59,440 --> 00:14:04,040
emergency reasons that you stated we
385
00:14:01,959 --> 00:14:06,120
have to drop these regulations and it
386
00:14:04,040 --> 00:14:08,040
seems that catalyst's position is
387
00:14:06,120 --> 00:14:10,440
they're using the emergency rule making
388
00:14:08,040 --> 00:14:13,079
Authority on this hurried up basis to
389
00:14:10,440 --> 00:14:15,839
meet that end ofe deadline cloaked as an
390
00:14:13,079 --> 00:14:19,000
emergency to maybe generate a revenue
391
00:14:15,839 --> 00:14:20,440
grab around accessories that's right the
392
00:14:19,000 --> 00:14:22,519
way I look at it and it wasn't that big
393
00:14:20,440 --> 00:14:24,079
of an overhaul by the way I mean I know
394
00:14:22,519 --> 00:14:26,880
they eliminated the cultivation tax with
395
00:14:24,079 --> 00:14:28,759
AB 195 in terms of the excise tax it
396
00:14:26,880 --> 00:14:30,199
wasn't as big of an overhaul as the
397
00:14:28,759 --> 00:14:32,399
everyone was thinking it's not like they
398
00:14:30,199 --> 00:14:34,279
changed the Cannabis excise tax and the
399
00:14:32,399 --> 00:14:36,120
collect and how much it was and what was
400
00:14:34,279 --> 00:14:38,040
collected on the language CH stayed the
401
00:14:36,120 --> 00:14:39,440
same for the most part everything stayed
402
00:14:38,040 --> 00:14:40,600
the same for the most part the only
403
00:14:39,440 --> 00:14:42,600
difference was where it was being
404
00:14:40,600 --> 00:14:43,880
collected and remitted before
405
00:14:42,600 --> 00:14:46,120
Distributors were supposed to collect
406
00:14:43,880 --> 00:14:47,759
and remitted after the retailers were
407
00:14:46,120 --> 00:14:49,720
they included some vendor credits they
408
00:14:47,759 --> 00:14:52,720
included some other features in the tax
409
00:14:49,720 --> 00:14:55,079
code but it wasn't some huge overhaul of
410
00:14:52,720 --> 00:14:57,279
the system it was just a huge overhaul
411
00:14:55,079 --> 00:14:59,519
of the administration so yeah they had
412
00:14:57,279 --> 00:15:01,120
the year to to issue regul ulations to
413
00:14:59,519 --> 00:15:03,120
accommodate what they've been doing for
414
00:15:01,120 --> 00:15:04,800
the last 5 years and to switch it over
415
00:15:03,120 --> 00:15:05,920
to this new system and so they had a
416
00:15:04,800 --> 00:15:07,480
year to do that and they did pass
417
00:15:05,920 --> 00:15:09,079
regulations not the first time they used
418
00:15:07,480 --> 00:15:11,680
this regulation right they passed
419
00:15:09,079 --> 00:15:13,360
emergency regulations early in 2023 that
420
00:15:11,680 --> 00:15:15,480
were effective they actually changed
421
00:15:13,360 --> 00:15:17,000
regulation 3700 but they didn't touch
422
00:15:15,480 --> 00:15:18,440
the Cannabis accessories language when
423
00:15:17,000 --> 00:15:21,279
they amended that which is a very
424
00:15:18,440 --> 00:15:23,279
important feature if it goes forward so
425
00:15:21,279 --> 00:15:26,360
sideline your challenge if it goes
426
00:15:23,279 --> 00:15:28,800
forward what happens to retailers as a
427
00:15:26,360 --> 00:15:31,360
whole if this language stands and as you
428
00:15:28,800 --> 00:15:33,040
said emergency for 180 days but you and
429
00:15:31,360 --> 00:15:34,839
I know this and Regulatory practitioners
430
00:15:33,040 --> 00:15:36,680
know this nine times out of 10 those
431
00:15:34,839 --> 00:15:39,199
emergency regulations become the
432
00:15:36,680 --> 00:15:41,560
permanent rules right actually well one
433
00:15:39,199 --> 00:15:43,399
thing I didn't I forgot to mention
434
00:15:41,560 --> 00:15:46,680
actually I had to he as my notes is that
435
00:15:43,399 --> 00:15:49,560
when they pass AB 195 the APA lost for
436
00:15:46,680 --> 00:15:51,600
180 days the ab15 gave them the
437
00:15:49,560 --> 00:15:53,560
emergency regulations to be in forced
438
00:15:51,600 --> 00:15:55,079
for two years whatever these emergency
439
00:15:53,560 --> 00:15:57,600
regulations are they will be there for
440
00:15:55,079 --> 00:16:00,160
two years that's a big deal so it's not
441
00:15:57,600 --> 00:16:02,600
just yeah it's a huge
442
00:16:00,160 --> 00:16:05,240
and again if they stand and they become
443
00:16:02,600 --> 00:16:07,199
permanent what happens to California
444
00:16:05,240 --> 00:16:08,600
retail which if anybody's been watching
445
00:16:07,199 --> 00:16:10,399
they know the California industry is
446
00:16:08,600 --> 00:16:12,399
struggling as a whole a race to the
447
00:16:10,399 --> 00:16:14,079
bottom that's no secret I think in any
448
00:16:12,399 --> 00:16:16,120
of these states but what impact does
449
00:16:14,079 --> 00:16:18,639
this have it depends on how much you
450
00:16:16,120 --> 00:16:20,839
knew about this issue so for us we've
451
00:16:18,639 --> 00:16:23,160
been separating out the Cannabis um from
452
00:16:20,839 --> 00:16:25,000
Cannabis accessories to help reduce
453
00:16:23,160 --> 00:16:27,120
excise tax on the customers that helped
454
00:16:25,000 --> 00:16:29,120
us remain competitive of course but we
455
00:16:27,120 --> 00:16:31,399
also know that a lot of people have been
456
00:16:29,120 --> 00:16:33,600
watching what we've been doing and it's
457
00:16:31,399 --> 00:16:35,639
it wasn't a huge secret it's been out
458
00:16:33,600 --> 00:16:37,880
there and so a lot of retailers have hit
459
00:16:35,639 --> 00:16:40,079
us off hey we your receipts look a
460
00:16:37,880 --> 00:16:41,720
certain way why is that and we're not
461
00:16:40,079 --> 00:16:43,120
we're pretty open book we're not there
462
00:16:41,720 --> 00:16:45,199
to not tell everybody what's happening
463
00:16:43,120 --> 00:16:46,759
so a lot of retailers were looking into
464
00:16:45,199 --> 00:16:48,480
it and trying to figure out how to do
465
00:16:46,759 --> 00:16:49,959
that but a lot of retailers also didn't
466
00:16:48,480 --> 00:16:51,639
know about it so for those retailers who
467
00:16:49,959 --> 00:16:53,399
didn't know about it it's really as
468
00:16:51,639 --> 00:16:55,000
business as usual and you're going to
469
00:16:53,399 --> 00:16:57,519
have to hope that you have legislative
470
00:16:55,000 --> 00:16:58,880
action to help reduce the tax for those
471
00:16:57,519 --> 00:17:01,839
that were looking for a way way to
472
00:16:58,880 --> 00:17:04,480
legally reduce the excise tax to help
473
00:17:01,839 --> 00:17:06,480
reduce the burdens on this industry it
474
00:17:04,480 --> 00:17:08,439
completely stops that this regulation
475
00:17:06,480 --> 00:17:10,280
completely stops a legal way to help
476
00:17:08,439 --> 00:17:11,919
reduce the Cannabis excise tax and now
477
00:17:10,280 --> 00:17:13,360
you're now you're going to have to hope
478
00:17:11,919 --> 00:17:15,280
that you have legislative action
479
00:17:13,360 --> 00:17:17,160
especially considering that cdtfa now
480
00:17:15,280 --> 00:17:20,720
has the authority to increase the excise
481
00:17:17,160 --> 00:17:22,919
tax beginning in 2025 up to 19% for
482
00:17:20,720 --> 00:17:25,280
those who were aware it stops that and
483
00:17:22,919 --> 00:17:28,079
you're left with whatever the tax rate
484
00:17:25,280 --> 00:17:30,360
is but more importantly is the power
485
00:17:28,079 --> 00:17:32,480
that the ctfa took in this action that
486
00:17:30,360 --> 00:17:34,840
just to make up things as they go is
487
00:17:32,480 --> 00:17:37,799
more worrisome in my opinion and if this
488
00:17:34,840 --> 00:17:39,400
was to were to stand it's yeah we can't
489
00:17:37,799 --> 00:17:41,919
reduce the excise tax the way we wanted
490
00:17:39,400 --> 00:17:43,640
to but it allows them to essentially
491
00:17:41,919 --> 00:17:46,080
make up rules as they go whenever they'd
492
00:17:43,640 --> 00:17:48,960
like and if the oal is not going to do
493
00:17:46,080 --> 00:17:50,640
its job in disapprove these regulations
494
00:17:48,960 --> 00:17:53,240
as they're required to then what's it
495
00:17:50,640 --> 00:17:55,240
for them to legislate from their desk so
496
00:17:53,240 --> 00:17:57,280
to speak this is like an administrative
497
00:17:55,240 --> 00:17:59,520
practitioner's Dream It's like a law
498
00:17:57,280 --> 00:18:01,600
school pattern right right and how you
499
00:17:59,520 --> 00:18:03,360
overturn government decision which is
500
00:18:01,600 --> 00:18:06,840
not easy to do now before we kind of get
501
00:18:03,360 --> 00:18:09,600
into to that um how many California
502
00:18:06,840 --> 00:18:11,559
Cannabis operators even know about this
503
00:18:09,600 --> 00:18:13,520
case the reaction we're getting from the
504
00:18:11,559 --> 00:18:15,640
case it seems like a seismic event tell
505
00:18:13,520 --> 00:18:17,400
you honestly I think a lot of retailers
506
00:18:15,640 --> 00:18:19,280
are jumping on board we have a lot of
507
00:18:17,400 --> 00:18:21,600
our I mean we don't have enemies but
508
00:18:19,280 --> 00:18:23,480
let's say competitors right reaching out
509
00:18:21,600 --> 00:18:25,280
to us tell us how you do it what's going
510
00:18:23,480 --> 00:18:26,799
on well we have our Auditors looking at
511
00:18:25,280 --> 00:18:29,440
it and so the Auditors actually like
512
00:18:26,799 --> 00:18:31,120
your tax position I mean people are are
513
00:18:29,440 --> 00:18:33,640
watching and I haven't seen this many
514
00:18:31,120 --> 00:18:35,640
news articles in California regarding a
515
00:18:33,640 --> 00:18:38,240
particular issue in a very long time and
516
00:18:35,640 --> 00:18:40,679
so I think majority of retailers now
517
00:18:38,240 --> 00:18:43,280
know of this cannabis accessory and
518
00:18:40,679 --> 00:18:46,080
cannabis good issue because you know the
519
00:18:43,280 --> 00:18:47,880
industry is very small so to speak and I
520
00:18:46,080 --> 00:18:49,440
think a lot every day everybody's seeing
521
00:18:47,880 --> 00:18:51,520
I'm seeing my LinkedIn posts are just
522
00:18:49,440 --> 00:18:53,720
going I never seen more LinkedIn posts
523
00:18:51,520 --> 00:18:56,039
about a specific issue in a very long
524
00:18:53,720 --> 00:18:58,360
time so to be fair that's an interesting
525
00:18:56,039 --> 00:19:00,280
thing and then it's speculative but I I
526
00:18:58,360 --> 00:19:01,919
think it's warranted to ask what do you
527
00:19:00,280 --> 00:19:05,080
think your chances are of prevailing
528
00:19:01,919 --> 00:19:07,000
here given how narrow the challenges
529
00:19:05,080 --> 00:19:08,200
have to be successful when you're
530
00:19:07,000 --> 00:19:11,120
dealing with the administrative
531
00:19:08,200 --> 00:19:13,159
procedure act and overturning government
532
00:19:11,120 --> 00:19:15,039
decisions where frankly under the law
533
00:19:13,159 --> 00:19:16,840
the deck is stacked against the
534
00:19:15,039 --> 00:19:18,960
petitioner because it's such a narrow
535
00:19:16,840 --> 00:19:22,120
Lane to overturn this kind of decision-
536
00:19:18,960 --> 00:19:24,640
making right yeah no of course I mean
537
00:19:22,120 --> 00:19:26,280
and and as attorneys we don't speak in
538
00:19:24,640 --> 00:19:27,880
absolutes right we don't we don't speak
539
00:19:26,280 --> 00:19:30,520
in certainties we say oh there's a
540
00:19:27,880 --> 00:19:32,720
chance say this there's that and there's
541
00:19:30,520 --> 00:19:34,320
no one will ever give a guarantee but
542
00:19:32,720 --> 00:19:35,440
really and I'm a conservative person
543
00:19:34,320 --> 00:19:38,000
when it comes to these type of
544
00:19:35,440 --> 00:19:40,880
predictions especially with lawsuits if
545
00:19:38,000 --> 00:19:42,559
the court follows the law if the court
546
00:19:40,880 --> 00:19:45,039
looks at this and says this is what the
547
00:19:42,559 --> 00:19:46,480
APA provides and you didn't follow that
548
00:19:45,039 --> 00:19:48,360
which we believe is exactly what
549
00:19:46,480 --> 00:19:51,039
happened then the chances should be very
550
00:19:48,360 --> 00:19:53,440
high the APA says this you didn't do
551
00:19:51,039 --> 00:19:55,200
this therefore the regulation is invalid
552
00:19:53,440 --> 00:19:57,320
and that's as simple as that I think
553
00:19:55,200 --> 00:19:59,960
that is a very simple case tell you
554
00:19:57,320 --> 00:20:01,919
honestly do do I think is do I is there
555
00:19:59,960 --> 00:20:05,080
a possibility that that's not how the
556
00:20:01,919 --> 00:20:08,440
court sees it of course right am I an
557
00:20:05,080 --> 00:20:10,440
expert in the APA not necessarily but I
558
00:20:08,440 --> 00:20:12,440
know enough to know what the APA says
559
00:20:10,440 --> 00:20:14,120
and what they did and I'm hoping that's
560
00:20:12,440 --> 00:20:16,600
enough and so I think the chances are
561
00:20:14,120 --> 00:20:18,159
pretty good if the laws applied as far
562
00:20:16,600 --> 00:20:20,080
as I'm concerned yeah I'm definitely
563
00:20:18,159 --> 00:20:21,520
going to be watching because I I do
564
00:20:20,080 --> 00:20:23,240
personally feel like it's a major
565
00:20:21,520 --> 00:20:25,120
victory to overturn government
566
00:20:23,240 --> 00:20:26,760
regulation because your paths to
567
00:20:25,120 --> 00:20:28,480
challenge I think you said there are six
568
00:20:26,760 --> 00:20:30,280
bases in California where you try to
569
00:20:28,480 --> 00:20:31,960
overturn decision-making it's typically
570
00:20:30,280 --> 00:20:33,840
things like arbitrary and capricious
571
00:20:31,960 --> 00:20:36,720
overreach of authority I don't even
572
00:20:33,840 --> 00:20:39,200
remember from eons ago what the other
573
00:20:36,720 --> 00:20:41,039
bases are but I know it's not very many
574
00:20:39,200 --> 00:20:42,280
so I'm definitely going to be going to
575
00:20:41,039 --> 00:20:44,600
be watching and it could set a very
576
00:20:42,280 --> 00:20:46,360
interesting precedent but just to
577
00:20:44,600 --> 00:20:48,240
conclude because I think everybody looks
578
00:20:46,360 --> 00:20:50,480
at California and people who are not
579
00:20:48,240 --> 00:20:52,720
cluin they think that it's Gang Busters
580
00:20:50,480 --> 00:20:54,559
everyone's making money hand over fist
581
00:20:52,720 --> 00:20:57,000
that there's constant expansion it's the
582
00:20:54,559 --> 00:20:59,080
land of opportunity and then you have
583
00:20:57,000 --> 00:21:00,520
the other side of the coin where you
584
00:20:59,080 --> 00:21:02,320
have other states that say I don't want
585
00:21:00,520 --> 00:21:03,880
to be like that I think it's a freefor
586
00:21:02,320 --> 00:21:06,440
all they have huge problems with
587
00:21:03,880 --> 00:21:09,880
diversion etc etc with this latest
588
00:21:06,440 --> 00:21:12,159
iteration of rul making yet again taking
589
00:21:09,880 --> 00:21:13,880
a bite out of the tax Apple which I
590
00:21:12,159 --> 00:21:14,760
think CDT faa's position is it's always
591
00:21:13,880 --> 00:21:16,200
been this way what are you guys
592
00:21:14,760 --> 00:21:18,440
complaining about it's always been this
593
00:21:16,200 --> 00:21:21,159
way we're just clarifying right how do
594
00:21:18,440 --> 00:21:22,960
you think California Cannabis is fairing
595
00:21:21,159 --> 00:21:24,679
overall compared to other states with
596
00:21:22,960 --> 00:21:27,679
adult youth since the overwhelming
597
00:21:24,679 --> 00:21:30,080
majority now have it it's tough to say
598
00:21:27,679 --> 00:21:32,039
right Catalyst itself is California
599
00:21:30,080 --> 00:21:33,520
exclusive so so my interest has always
600
00:21:32,039 --> 00:21:35,360
been California what I observe is
601
00:21:33,520 --> 00:21:37,600
California what I see from other states
602
00:21:35,360 --> 00:21:40,520
New York is the roll out is horrible
603
00:21:37,600 --> 00:21:42,520
horrifying as actually it's lawsuits on
604
00:21:40,520 --> 00:21:45,039
lawsuits starting stopping licensing
605
00:21:42,520 --> 00:21:46,840
process it's so so that one that one is
606
00:21:45,039 --> 00:21:49,799
is a tough one but then I see something
607
00:21:46,840 --> 00:21:53,240
like Michigan who had a report of sales
608
00:21:49,799 --> 00:21:55,080
of about 2.9 billion in 2023 I believe
609
00:21:53,240 --> 00:21:56,799
that's the amount they sold and I Look
610
00:21:55,080 --> 00:21:58,799
at California which was five bills but
611
00:21:56,799 --> 00:22:02,000
then I also look at California has three
612
00:21:58,799 --> 00:22:04,120
times the population of Michigan right
613
00:22:02,000 --> 00:22:05,600
so per capita some states are doing much
614
00:22:04,120 --> 00:22:08,000
better but really if you're going to
615
00:22:05,600 --> 00:22:09,880
compare states to States every state is
616
00:22:08,000 --> 00:22:11,679
essentially their own country supposedly
617
00:22:09,880 --> 00:22:13,080
when it comes to cannabis right there's
618
00:22:11,679 --> 00:22:15,360
no open borders you're supposed to keep
619
00:22:13,080 --> 00:22:17,320
it within the state and so what I see as
620
00:22:15,360 --> 00:22:19,840
success in any state whether you're
621
00:22:17,320 --> 00:22:23,159
California Michigan Illinois New York is
622
00:22:19,840 --> 00:22:25,279
how successful were you in eradicating
623
00:22:23,159 --> 00:22:26,799
the elm Market because that's that
624
00:22:25,279 --> 00:22:28,840
should be the ultimate goal because you
625
00:22:26,799 --> 00:22:31,200
can't have a real Market when in
626
00:22:28,840 --> 00:22:33,720
California for example two out of every
627
00:22:31,200 --> 00:22:36,200
three sales the retail PL at the retail
628
00:22:33,720 --> 00:22:38,120
level is to the elicit market so so are
629
00:22:36,200 --> 00:22:40,159
we successful in my opinion absolutely
630
00:22:38,120 --> 00:22:42,080
not right there's some people and and a
631
00:22:40,159 --> 00:22:44,000
lot of money was lost in California I'm
632
00:22:42,080 --> 00:22:45,799
sure you've seen it so when in
633
00:22:44,000 --> 00:22:48,039
California when two of the three cells
634
00:22:45,799 --> 00:22:50,000
are still to be a listent market it is
635
00:22:48,039 --> 00:22:51,640
not a successful program some people
636
00:22:50,000 --> 00:22:53,039
might find success in it and there's a
637
00:22:51,640 --> 00:22:56,240
lot of people who been wiped out in this
638
00:22:53,039 --> 00:22:58,760
industry but the high taxes the high
639
00:22:56,240 --> 00:23:00,679
regulation and the local control there's
640
00:22:58,760 --> 00:23:02,840
still 61% of the cities and counties
641
00:23:00,679 --> 00:23:05,000
that don't allow it and so do I think
642
00:23:02,840 --> 00:23:08,080
the California Market is the best Market
643
00:23:05,000 --> 00:23:09,880
in cannabis yes I think it absolutely is
644
00:23:08,080 --> 00:23:12,520
right in terms of its size in terms of
645
00:23:09,880 --> 00:23:15,400
its potential do I think California has
646
00:23:12,520 --> 00:23:17,760
successfully implemented a program no I
647
00:23:15,400 --> 00:23:20,480
don't but there's still opportunities
648
00:23:17,760 --> 00:23:22,159
within the market to succeed so as
649
00:23:20,480 --> 00:23:24,880
compared to other states it's tough to
650
00:23:22,159 --> 00:23:27,320
say at least I don't have all the facts
651
00:23:24,880 --> 00:23:29,520
in hand but I don't believe California
652
00:23:27,320 --> 00:23:31,559
did the job it needed to do and there's
653
00:23:29,520 --> 00:23:32,760
still a long way to go I agree with you
654
00:23:31,559 --> 00:23:34,120
on that and I don't think elicit
655
00:23:32,760 --> 00:23:36,480
operators are very worried about
656
00:23:34,120 --> 00:23:39,440
reporting excise taxes it's just
657
00:23:36,480 --> 00:23:41,559
fundamentally unfair and and personally
658
00:23:39,440 --> 00:23:44,679
I feel that cannabis is dying a thousand
659
00:23:41,559 --> 00:23:46,400
deaths by a Thousand Cuts relative to
660
00:23:44,679 --> 00:23:48,159
tax regulation in addition to local
661
00:23:46,400 --> 00:23:49,640
control issues but I'll have to bring
662
00:23:48,159 --> 00:23:51,559
you back to talk about local control
663
00:23:49,640 --> 00:23:53,679
because I know catalyst is has it has
664
00:23:51,559 --> 00:23:55,120
had its fair share of challenges in that
665
00:23:53,679 --> 00:23:56,960
regard too but I want to thank you
666
00:23:55,120 --> 00:23:58,799
Anthony for coming on the podcast to
667
00:23:56,960 --> 00:24:01,720
talk about this I wish you the best of
668
00:23:58,799 --> 00:24:03,640
luck in challenging oal and the cdtfa I
669
00:24:01,720 --> 00:24:06,200
will certainly be watching so thanks
670
00:24:03,640 --> 00:24:06,200
again thank you
671
00:24:23,279 --> 00:24:28,399
for and that concludes today's episode
672
00:24:25,720 --> 00:24:32,200
of the Cannabis law Now podcast until
673
00:24:28,399 --> 00:24:32,200
next time stay alert stay
674
00:24:36,000 --> 00:24:39,000
alive