California Pauses Cannabis Tax Hike
- barneyelias0
- 2 hours ago
- 1 min read
September 23 2025
Overview
Governor Gavin Newsom signed AB 564 to pause a cannabis tax increase. The bill aims to support the legal cannabis market.
Bill Details
Pauses 25% excise tax hike for five years, effective October 2025.
Maintains 15% tax rate until June 30, 2030.
Requires California Department of Tax and Fee Administration to adjust rates based on prior revenue estimates.
Statements
Newsom: “We’re rolling back this tax hike so the legal market can grow, and communities benefit.”
Assemblymember Matt Haney: “AB 564 protects jobs and ensures the legal cannabis market thrives.”
Industry Impact
Reverses tax increase from 15% to 19% that began July 2024.
Aims to weaken illegal market and support legal businesses.
Additional Measures
Senate committee passed legislation to integrate hemp-derived products into cannabis programs.
California offers cannabis-funded grants to address prohibition’s impacts.
Context
California’s Supreme Court upheld the state’s cannabis program in June 2025.
Federal prohibition continues to challenge legal market growth.
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