As California's legal cannabis market continues to mature, Governor Gavin Newsom today signed legislation, AB 564 (Haney), that eliminates a 25% tax increase on California's legal cannabis industry, building on the Administration's ongoing work to ensure the long-term success of the legal cannabis market.
"California's cannabis economy can bring enormous benefits to our state, but only if our legal industry is given a fair chance to compete against the untaxed and unregulated illegal market," said Assemblymember Matt Haney (D–San Francisco). "AB 564 helps level the playing field. It protects California jobs, keeps small businesses open, and ensures that our legal cannabis market can grow and thrive the way voters intended."
California's regulated cannabis market is the largest in the world, fostering environmental stewardship, compliance-tested products, and fair labor practices, while driving economic growth and funding vital programs in education, public health, and environmental protection. AB 564 reverses a 25% tax increase on California's legal cannabis industry and sets the state's cannabis excise tax rate at 15% until 2028, allowing legal businesses to remain competitive and promoting the industry's long-term growth.
The Administration recently enacted measures to bolster long-term enforcement efforts against illegal operators by dedicating cannabis tax revenue to fund civil and criminal enforcement activities. This will reduce the burden on legal businesses while ensuring sustained actions against illegal operators. In addition, Board of State and Community Corrections (BSCC) grant eligibility has expanded to local jurisdictions, especially those allowing retail access, to further enhance and support local enforcement efforts against illegal cannabis activity.
Source: Office of Governor Gavin Newsom
