A bill that would claw back tax increases on cannabis sales is sitting on the governor's desk.
AB 564 by Assemblymember Matt Haney (D-San Francisco), cleared the state legislature last week with a single no vote in the Senate. The measure would decrease the excise tax on cannabis retail sales from 19% to 15%.
Humboldt County dispensaries and the cannabis industry are hoping the bill is signed into law — but environmental organizations point to millions in funding used for local illegal cannabis cleanup projects, without a clear replacement in the state budget.
The 19% rate went into effect this summer, a mandate from a modification to Proposition 64, which legalized recreational cannabis sales and cultivation of cannabis in 2016. The measure committed tax dollars to remediation programs, sourced from a cultivation and excise tax.
Lawmakers removed the statewide cultivation tax in 2022, but made up for the cut by requiring the retailers to cover for the lost funds. This meant the rate reached 19% this year, the maximum under the provision.
