SUPPORT AB 564 / Excise Tax Increase

• Urge your legislator to support AB 564 (Haney)

• Download CaCOA's co-sponsor support letter

• Download the coalition's letter to Governor Newsom and legislative leadership

CHALLENGE: California's legal cannabis industry is facing a potentially devastating blow as the excise tax is scheduled to increase from 15% to 19% on July 1, 2025, which would accelerate the ongoing market collapse, drive more consumers to the illicit market, and ironically reduce overall tax revenue. Since 2021, California's licensed cannabis sales have dropped by 19%, over 10,800 licenses are now inactive or surrendered (exceeding active licenses), and nearly 5,000 industry jobs were lost in 2023 alone, creating an urgent need for intervention.

SOLUTION: Assembly Bill 564 (Haney) prevents the scheduled excise tax increase by repealing the requirement for the California Department of Tax and Fee Administration (CDTFA) to adjust the excise tax every two years, providing critical relief to struggling cannabis businesses, protecting jobs, keeping cannabis products more affordable, and helping stabilize tax revenues by keeping consumers in the legal market.

WHAT THE BILL WILL DO

• Maintain the cannabis excise tax rate at no more than 15% to prevent further destabilization of the legal industry

• Help protect thousands of California jobs in the cannabis sector

• Keep legal cannabis products more affordable for consumers, reducing incentives to purchase from the unregulated market

• Protect consumer safety by encouraging purchases from licensed retailers selling tested, regulated products

• Stabilize state tax revenue by preventing further consumer flight to untaxed illicit markets

• Support small cannabis businesses, family farms, and retailers at risk of closure

• Help California maintain its position as a leader in the regulated cannabis industry