NEWS & RESOURCES

With respect to cannabis, the January Budget does not propose changes to the state’s cannabis tax structure. However, revenue assumptions embedded in the proposal, when viewed alongside actual tax collection data, underscore ongoing challenges facing California’s legal cannabis market and raise important considerations as the budget process moves forward.

President Donald Trump signed an executive order (EO) on December 18, 2025, directing federal agencies to expedite the reclassification of cannabis from Schedule I to Schedule III, representing a significant and measured step toward federal recognition of cannabis's medical value. 

When Governor Gavin Newsom signed Assembly Bill 564 (Haney) into law this fall, California made a critical decision to protect the public health and safety of cannabis consumers and the community programs that rely on cannabis excise taxes for funding.  The bill, which repealed an automatic tax increase and locked the excise tax at 15% until at least 2028, was sound and necessary. And the early data now proves it. 

When California voters approved Proposition 64 in 2016, they had a clear vision: create a regulated cannabis market that would fund vital public services, create good jobs, protect public health and safety, and finally displace the dangerous illicit market.  Nearly seven years after recreational sales began in 2018, the data confirms that cannabis legalization has delivered significant economic benefits to California.

When the Missouri Cannabis Trade Association released its comprehensive Hemp Hoax Report last month, it delivered a stark confirmation of what California's legal cannabis industry has been warning about for years: unregulated intoxicating hemp products pose a serious threat to public health, consumer safety, and fair market competition.

Ultimately, AB 8 ensures that California’s cannabis and hemp policies advance together, grounded in science, fairness, and, most importantly, public safety.

A recent op-ed opposing Assembly Bill 564 (Haney) misunderstands both Proposition 64's intent and how cannabis taxes actually work. The record deserves clarification on both the law's purpose and the economic realities facing California's legal cannabis market and community programs that rely on these tax revenues.

California's licensed cannabis industry takes child-resistant packaging and labeling laws extremely seriously. The overwhelming evidence shows that most violations related to youth-attractive packaging occur in the illicit cannabis and unregulated hemp markets, not within our licensed industry. 

The choice is clear: support sustainable tax policy that protects communities, consumers, and public safety, or watch California's legal cannabis market disappear entirely, taking community programs and tax revenue down with it.

Governor Newsom’s revised 2025–26 state budget proposes a comprehensive strategy to combat California’s persistent illicit cannabis market. This strategy is operationalized through two complementary trailer bills: (1) expanded enforcement authority for the Department of Cannabis Control (DCC), and (2) amendments to Proposition 64 to reallocate enforcement funding.

Cannabis businesses haven’t just integrated into our community—they’ve become valuable partners in building a stronger, healthier Alameda.

Without immediate policy reforms to 1) halt the scheduled excise tax increase, 2) crack down on unlicensed operations, and 3) expand consumer access to legal retail, many more California cannabis businesses will not survive to see future 420 celebrations.