The California State Assembly unanimously voted on Monday to halt a slated 25% tax increase on the cannabis industry from going into effect on July 1.
In a 74-0 vote, the Assembly approved AB564 by Asm. Matt Haney (D-San Francisco). The bill would prevent the retail excise tax from increasing to 19% from its current 15%.
"If we continue to pile on more taxes and fees onto our struggling small cannabis businesses, California's cannabis culture is under serious threat of extinction," Haney said in a statement.
According to SFGATE, taxable cannabis sales in California amounted to $1.088 billion in 2025’s first quarter, the lowest in five years.
Retailers are responsible for paying the tax regardless of consumer sales. Haney attributes the steady growth of cannabis sales in other states, such as Colorado and Michigan, to lower taxes and fewer barriers for businesses and consumers.
"If we want to support our cannabis industry that drives millions of visitors to California every year, adding more costs makes absolutely no sense," said Haney.