Cannabis industry trying to break the promise of Prop 64

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OPINION – A decade ago, I was one of two legal proponents for 1996’s Proposition 64, the initiative that legalized adult recreational use of cannabis. I supported this ballot measure because it explicitly promised voters that it would “generate hundreds of millions of dollars in new state revenue annually for restoring and repairing the environment, youth treatment and prevention, community investment, and law enforcement” through taxes on cannabis sales and cultivation.

As a former president of the California Fish and Game Commission, National Park Ranger, and Federal wildlife agent, I knew better than most the damage being done to our public lands by illegal cannabis cultivation.  I believed that California would benefit from revenues generated by legal cannabis cultivation and sales taxes. The promise of funding vital services like childcare, youth drug dependency, environmental restoration, and local law enforcement was a major selling point to California voters, too.

I am appalled that the cannabis industry is now trying to break Proposition 64’s promise by trying to cut taxes on pot sales to increase industry revenues.

Their tax cut bill, AB 564, would sharply cut funding for childcare, youth programs, environmental cleanup, and law enforcement – all specifically supported by taxes on cannabis sales. AB 564 would betray voters’ intent by shifting $852 million from these programs to provide tax breaks that increase profits for the cannabis industry. This cynical move by the industry contradicts the clear purpose of Proposition 64 and the promises made to California when voters approved the initiative.

Unfortunately, this isn’t the first time the cannabis industry has broken their promise to dedicate tax funds for child care, youth services, and environmental restoration.

In 2022, prompted by the cannabis industry, state officials agreed to a legislative compromise that repealed the voter-created Cannabis Cultivation Tax. As a result, tax revenues that were intended for environmental restoration, youth treatment and prevention, and law enforcement decreased by $200 million per year.

This legislative compromise was based on a commitment to replace the lost revenues by increasing the Cannabis Excise Tax by up to four percent starting on July 1, 2025.  Youth, public health, and environmental groups agreed to the 2022 compromise based on this commitment. The statutorily required increase in the Excise tax took effect this July 1.

Now the cannabis industry, which agreed to this 2022 compromise, wants to break their word again with their sponsored bill AB 564.  I am not alone in taking offense that the cannabis industry is acting in bad faith by sponsoring this bill. Over 116 child and youth-serving organizations and tribal communities recently sent a letter to Governor Newsom urging him to protect funding for child care and youth services by opposing the tax cut in AB 564.

In their letter, they note that the funding flowing to our local communities from state cannabis tax revenues has been a lifeline for youth-serving organizations, enabling them to serve thousands of children and youth with child care, substance abuse prevention programs, mentoring, mental health services, and youth leadership initiatives. Their capacity to serve our communities will be greatly diminished by an additional reduction in taxes for this recreational drug industry.

Many vulnerable communities in California are already facing significant federal funding cuts for programs that support children and families because of the actions taken by the Trump Administration. In the upcoming months, many families will face increased hunger and untreated health issues. They will also have a harder time paying rent and making ends meet. Immigrant families are being affected especially severely.

The cannabis industry claims that their sector is suffering due to high taxes and competition from the illegal market, yet the California legal market continues to grow under current rates.

Cutting cannabis taxes further won’t fix overproduction or the illegal market, but it will devastate the youth programs, environmental protections, and community investments voters were promised. And, illogically, AB 564 would cut funding for programs we depend on to fight illegal cannabis grows and sales.

My goal as a legal proponent of Proposition 64 was to safeguard our children and our environment. AB 564 threatens both. Harmful cuts to child and youth services, environmental restoration efforts, and law enforcement will worsen the challenges our state faces during this difficult time.

Voters didn’t intend to give the cannabis industry tax breaks when they approved Proposition 64. As State Senators consider AB 564, they should prioritize protecting our kids and the environment, and honor the voters’ intent by rejecting AB 564, the bad-faith cannabis tax cut bill.

Michael Sutton is the former president of the California Fish and Game Commission and an official proponent when Proposition 64 was on the ballot.