(KRON) — The cannabis industry is seeing some relief when it comes to taxes. Last week, one major tax was eliminated as part of a larger state budget agreement.

KRON On is streaming news live now

The most significant change is eliminating the cultivation tax. The cultivation tax was $10.08 per ounce for flowers.

“That was a huge drawback that was frankly driving plenty of people in the industry into the unregulated, underground, so-called ‘legacy’ industry,” said Medical cannabis attorney Robert Raich.

Raich said taxes like the cultivation tax resulted in loss of customers for many growers. Instead, Raich says as many as 80% of customers went to their “neighborhood drug dealers,” which sell cannabis untaxed.

“We need more reform, and we need more support,” said Coleman, who added that eliminating that one tax is not enough. “The situation is quite urgent and this really about mitigating a crisis underway. We’re looking at a significant collapse of the entire regulated supply chain of California.”

The bill will also freeze the excise tax at 15 percent for three years. That tax is on top of sales and other local taxes. It will continue to keep regulated cannabis sales more expensive than illicit sales.

“But it really should be reduced greatly, if not completely eliminated,” said Raich.