California’s struggling cannabis industry didn’t get the recommendation many hoped for — a call to sharply lower the industry’s tax rate — but a long-awaited state report did suggest a marijuana tax overhaul.

The report from California’s nonpartisan Legislative Analyst Office, released Tuesday, Dec. 17, says lawmakers should ditch the way the state currently taxes marijuana and, instead, tax cannabis at different rates based on its potency. Such a tax structure, the report said, would result in stable revenue and discourage cannabis abuse.

The report — the first of its kind since voters legalized cannabis three years earlier — also recommends California quit making licensed cultivators pay a tax based on the weight of marijuana they grow.

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