A California bill to create a tax credit for commercial cannabis retailers passed the state Senate on Thursday moving it next to the Assembly for policy hearings. The measure passed by a bipartisan 26-3 vote.

Under the legislation, legal cannabis businesses would receive a tax credit that is 25% of the amount of some qualified business expenses paid or incurred in a taxable year, not to exceed $250,000. The bill covers employment compensation equal to or above 150% of minimum wage including benefits, safety-related equipment and services, and employee workforce development and safety training.

According to California state Sen. Scott Weiner’s (D) Office, the bill is backed by the United Food and Commercial Workers (UFCW) Western States Council.

“Prop 64 was a major step forward for cannabis access, but our legal retailers are in danger of losing business to the illicit market, in part due to high taxes. SB 1336 will give legal businesses a much-needed leg up so Californians can continue to access safe and tested cannabis products.” – Weiner in a press release

In the press release, the senator estimated that the state’s unregulated cannabis market is worth about $8 billion and that licensed operators are “struggling under the weight of its unlicensed and untaxed competition.”

Additionally, “legal cannabis businesses deal with overhead costs associated with health, safety, and security protections that other industries do not,” Weiner’s Office said in the release. “And because the sale of cannabis remains illegal federally, these businesses are ineligible for tax deductions and credits related to normal overhead expenses.”

The measure has not yet been assigned to any Assembly committees.