Weed Week: California biz scrambles to avert July 1 tax hike

EXCERPT:

California’s cannabiz has weeks to avert a July 1 excise tax hike from 15% to 19%. The flailing industry, which saw the lowest Q1 sales since 2020, says the increase would send even more of its customers to the unlicensed market.

Operators were encouraged this week when the State Assembly passed a bill to stop the tax hike with a unanimous 74-0 vote. But the bill — A.B.564, sponsored by Assembly Member Matt Haney (D-SF) — still needs to clear the State Senate and get signed into law by Gov. Gavin Newsom. Even if it succeeds, it won’t take effect before fall at the earliest. 

Plus, Newsom has not endorsed the tax hike. Instead his recent May budget revisions offered the industry a maneuver that would avoid raising license fees.

Amy O’Gorman Jenkins, executive director of the California Cannabis Operators Association (CaCOA) said the industry lobby is mobilizing to bundle Newsom’s proposal with the tax cut. CaCOA aims to do this with a vehicle known as a budget trailer bill, which could pass in time to block the excise tax increase from taking effect.

“Raising taxes on a struggling industry—especially one already undercut by untaxed, unregulated operators—defies economic sense and contradicts Proposition 64’s core intent,” CaCOA argues.

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