California lawmakers have sent a bill to reverse a recent 25% tax hike on the California cannabis industry to Gov. Gavin Newsom’s (D) desk, CBS News reports.
Proposed by Asm. Matt Haney, a San Francisco Democrat, Assembly Bill 564 would reverse a nearly 25% cannabis industry tax hike that took effect on July 1. The proposal advanced from the Assembly in June with unanimous support, and was approved on Wednesday by the state Senate in a 39-1 vote.
The bill would reverse the tax hike and maintain the previous rate of 15% until 2028.
“If we want to support our cannabis industry that drives millions of visitors to California every year, adding more costs makes absolutely no sense.” — Haney, in a statement
The tax hike itself was caused by a previous law that removed a cannabis cultivation tax but included automatic adjustments to the industry’s tax rate if cannabis revenues start to fall, which they have.
California operators face some of the highest cannabis tax rates in the country, with taxes reaching up to 45% depending on the region.
Meanwhile, California retailers reported a historic 11% drop in cannabis sales during the first quarter of 2025.
