California to reduce excise tax starting October 1Unites States

California cannabis retailers are breathing a measured sigh of relief after Gov. Gavin Newsom signed a major tax cut into law on Monday.

Under Assembly Bill 564, authored by San Francisco Assemblymember Matt Haney, California’s cannabis excise tax will revert back to 15% on Oct. 1.

That cancels a nearly 25% increase to 19% that took effect July 1.

And 15% is where excise taxes will stay until at least 2028.

“We’re rolling back this cannabis tax hike so the legal market can continue to grow, consumers can access safe products, and our local communities see the benefits,” Newsom said in a statement Monday.

That’s a welcome development for the state’s struggling legal industry.

But operators squeezed by a combination of illicit market competition, oversupply and high taxes have been begging for an even more dramatic cut.

California cannabis tax cut comes after market contraction

The total tax burden for California cannabis, when state sales taxes and local taxes are applied, is still over 30% in many jurisdictions.

Even this tax cut angered public health advocates skeptical of the cannabis industry’s challenges.

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