Assemblymember Jones-Sawyer Bill to Allow Cannabis Business To Receive Same Deductions as Other Legal Businesses Heads to Governor

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(Sacramento – September 11, 2019) – This week, the California State legislature passed Assemblymember Jones-Sawyer’s (D- South Los Angeles) Assembly Bill (AB) 37, legislation that would allow legal cannabis businesses to deduct ordinary and necessary business expenses, and the bill now awaits a signature from the Governor.

“Due to anti-drug trafficking policies at the federal level, legal cannabis businesses are not able to make any deductions when paying taxes, which means they are taxed at higher rates than any other type of legal business in the state of California,” said Assemblymember Jones-Sawyer. “AB 37 will end the cannabis prohibition on businesses for the purpose of filing state taxes, helping legal businesses thrive.” 

Under current law, tax deductions that businesses are entitled to are rent, salaries, employee benefits, utilities, payments to contractors, marketing, repairs, and office expenses. All legitimate expenses incurred while conducting business, are tax-deductible expenses given to all industries, and the legal cannabis industry should not be an exception.

“The people of California have spoken and legalized the recreational use of cannabis and we should do everything we can to help the legal cannabis industry,” said Assemblymember Jones-Sawyer.  “In my district, too many illegal cannabis businesses thrive because they don’t play by the rules, AB 37 will play a vital role in leveling the playing field for legal cannabis businesses.”




Assemblymember Reginald Byron Jones-Sawyer, Sr. represents South Los Angeles, Florence-Firestone, Walnut Park, and a portion of Huntington Park. For more information about Assemblymember Jones-Sawyer, Sr., please visit