NEWS & RESOURCES

“At the end of the day, you end up with a total tax burden of around 40%” when all cannabis taxes are added up, explained Tiffany Devitt, director of regulatory affairs for CannaCraft.

“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,” Newsom said in a statement.

“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 child care, youth prevention, and public health programs.”

"The legal cannabis industry is in crisis," said Amy Jenkins, executive director of the California Cannabis Operators Association. "There were already consumers that weren't shopping at legal stores because they didn't want to pay the 40-50% price increase they would see at illegal stores."

"Reducing the tax back to 15% is an effort to help level the playing field and keep legal cannabis accessible for Californians shopping at licensed dispensaries," Carpenter said.

“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,” Amy O’Gorman, executive director of the California Cannabis Operators Association.

“By stopping this misguided tax hike, the Legislature recognized that smart policy grows revenue by keeping the legal market viable,” the organization said. “The passage of AB 564 proves that sound policy wins when state lawmakers listen to data over rhetoric.”

With the tax decrease taking effect on October 1st, cannabis buyers in California can expect to see lower prices in stores, potentially boosting the legal market.

Only 40% of cannabis consumed in California comes from licensed dealers, according to the state Department of Cannabis Control. Lawmakers, including the governor, argued that lowering the state tax would help stem closures and bankruptcies of legal businesses and help them regain enough of a foothold to compete with the illicit market.

Lawmakers gave final approval to the bill last week, sending the measure to the desk of Newsom, who has previously committed to signing it into law. The measure would drop the state excise tax on cannabis from 19% to 15% on Oct. 1 and maintain that tax rate until June 30, 2028.

“AB 8 seeks to protect public health by eliminating access to intoxicating hemp products outside of authorized dispensaries,” she said. “[The bill] will give state agencies and local governments the tools they need to protect our kids from synthetic products.”

The passage of AB 564 “proves that sound policy wins” when state lawmakers listen to “data over rhetoric,” said Amy O’Gorman, the executive director of the California Cannabis Operators Association.

Cannabis industry leaders also praised the outcome. Amy O’Gorman Jenkins, executive director of the California Cannabis Operators Association, said the legislation reflects “sound policy” that prioritizes a stable and regulated market over expanding the illicit trade. (California marijuana)

By stopping this misguided tax hike, the Legislature recognized that smart policy grows revenue by keeping the legal market viable. Driving consumers away from regulated dispensaries would have only undermined public safety and reduced funding for the very programs we all want to protect.” (California AB 564)

EXCERPT: "By stopping this misguided tax hike, the Legislature recognized that smart policy grows revenue by keeping the legal market...

Amy O’Gorman Jenkins, the executive director of the California Cannabis Operators Association, said the legal cannabis industry in California is subjected to an array of taxes, noting that no other age-restricted product in the state is taxed at the same rate, including alcohol and tobacco. (Newsom, AB 564)

“A 25% tax hike on an industry that’s barely hanging on is a full-blown disaster, and absolutely should have been avoided,” Haney said. “Raising this tax is a slap in the face of small cannabis businesses who simply can’t afford it and are competing with an illegal market that is booming.”

Ronald Allen, co-owner of a licensed dispensary in Bakersfield, worries the tax hike could put small businesses like his at risk. "It's affecting everybody across the board, everybody from the buyers to the growers," Allen said.