CaCOA Joins Assemblymember Haney to Urge Immediate Passage of AB 564 to Halt the Cannabis Excise Tax Hike

SACRAMENTO, Calif. — Today, the California Cannabis Operators Association (CaCOA) joined Assemblymember Matt Haney (D-San Francisco) at a press conference at the State Capitol to highlight the urgent need to pass AB 564 (Haney) — legislation that would stop the scheduled increase of the state cannabis excise tax from 15% up to 19% on July 1, 2025.

The data illustrate why this is critically needed:

• Since 2021, California’s legal cannabis sales have declined by 19%, and excise tax revenue is down 13%.

• More than 10,800 licenses are inactive or surrendered — exceeding the number of active licenses statewide.

• The industry lost nearly 5,000 jobs in 2023, following 12,600 job losses in 2022.

• Michigan now outsells California in licensed cannabis sales despite having just one-quarter of the population.

“With thousands of businesses already shuttered and tens of thousands of jobs lost, the legal cannabis industry is on the brink,” said Alex Freedman, President of CaCOA. “California should do everything it can to stabilize the regulated market, and AB 564 offers a lifeline to save businesses from bankruptcy and consumers from the health and safety dangers of the illicit market.”

AB 564 repeals the automatic tax increase enacted under AB 195 (Budget Committee, 2022), which empowers the California Department of Tax and Fee Administration (CDTFA) to increase the cannabis excise tax every two years. Without legislative intervention, the rate will rise to 19% this summer, a change that could trigger another wave of business closures and job losses.

“Raising taxes in a shrinking market is shortsighted and fiscally irresponsible,” said Freedman. “AB 564 will help level the playing field, protect jobs, and keep California competitive in the national cannabis economy. We thank Assemblymember Haney for his leadership and urge the Legislature to act before it’s too late.”

Octavia Crockett, a Sales Manager at Embarc Sacramento, a proud member of United Food & Commercial Workers, and a representative of the California Cannabis Operators Association, underscored the impact on workers:

“I love what I do and am proud to be part of this community-focused industry. But it’s hard out here. I’ve seen so many good people lose their jobs as cannabis businesses struggle under heavy taxes, unregulated hemp products, and unfair competition from the illegal market. AB 564 is a common-sense solution to help keep our jobs, protect consumers, and make the promise of Prop 64 real. We need our elected officials to stand with us.”

CaCOA is also encouraging members to submit letters of support for AB 564 and to work with local governments to adopt resolutions opposing the excise tax increase and urging swift passage of the bill.