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Governor Gavin Newsom Signs AB 564 to Stop Cannabis Tax Hike
- Laura Braden
- 3 hours ago
- 2 min read
Today, Governor Gavin Newsom signed legislation, Assembly Bill 564 (Haney), that eliminates a 25% tax increase on California’s legal cannabis industry, building on the Administration’s ongoing work to ensure the long-term success of the legal cannabis market, while also protecting consumers from the illicit market and the community programs that rely on these tax funds.
"We’re rolling back this cannabis tax hike so the legal market can continue to grow, consumers can access safe products, and our local communities see the benefits."
"California’s cannabis economy can bring enormous benefits to our state, but only if our legal industry is given a fair chance to compete against the untaxed and unregulated illegal market. AB 564 helps level the playing field. It protects California jobs, keeps small businesses open, and ensures that our legal cannabis market can grow and thrive the way voters intended.”
"The cannabis industry is grateful to Governor Newsom for his leadership in signing AB 564. He understood what opponents refused to acknowledge: you can't fund social programs with revenue that doesn't exist. By stopping this misguided tax hike, the Governor and Legislature chose smart policy that grows revenue by keeping the legal market viable instead of driving consumers back to dangerous, untested illicit products. This signing brings us closer to fulfilling Proposition 64's promise: patients and consumers accessing safe, regulated cannabis while generating sustainable tax revenue for childcare, youth prevention, and public health programs."
Amy O'Gorman Jenkins, CaCOA Executive Director
AB 564 reverses a 25% tax increase on California’s legal cannabis industry. It sets the state’s cannabis excise tax rate at 15% until 2028, allowing legal businesses to remain competitive and promoting the industry’s long-term growth.
