NEWS & RESOURCES

California's legal cannabis industry cannot withstand a more than 25% tax increase when sales have already declined by 19% and thousands of businesses have closed their doors. 

The conversation focused on protecting cannabis consumers and patients, who will ultimately bear the tax increase during challenging economic times. Jenkins explained how the tax increase threatens public health and safety by driving Californians to dangerous products in the unregulated market.

CaCOA's expanding membership reflects the growing collective strength of California's licensed cannabis industry.

"Then the economic report, which has been referenced in your analysis and elsewhere, commissioned by the Department of Cannabis Control, affirms what operators have been saying,” Jenkins said. “California's excise taxes and licensing fees are 124% and 162% higher respectively than Michigan's. And altogether, our taxes and fees account for about 77.5% of total wholesale value. That is not a sustainable framework."

“We have an illicit underground industry that competes with them and doesn’t actually pay any of the fines and fees that aid in enforcement. And now we have a possible tax hike, an increase, which means that more and more people are going to lose their businesses, more jobs will be lost. This is not a tax decrease. This is simply a freeze. We’re just trying to fight another day.”

The California Cannabis Operators Association (CaCOA) delivered powerful testimony before the Assembly Revenue & Taxation Committee on May 5, 2025, in support of AB 564 (Haney), which would halt the scheduled increase in the cannabis excise tax from 15% to 19% set to take effect July 1, 2025.