California’s cannabis excise tax increased to 19% as of July 1, 2025, adding pressure to both consumers and businesses. However, change may be on the horizon.
Assembly Bill 564 seeks to reduce the excise tax back down to 15% and lock it in through 2028. The bill has already passed through Committee and the full Assembly with unanimous support, and now awaits review in the Senate. Governor Newsom has stated that he intends to sign the bill if it reaches his desk.
If enacted, the tax rollback could take effect on October 1, 2025 (Q4).
Why This Matters
Lower excise taxes could mean relief for cannabis businesses struggling with thin margins, as well as more competitive pricing for consumers. For entrepreneurs, the rollback may also improve long-term planning and investment stability.
At the Law Offices of Scot Candell, we closely monitor legislative developments that affect California’s cannabis industry. We will continue to provide updates as this bill progresses.
📞 Need guidance? If you are a licensee, business operator, or investor seeking clarity on how changing cannabis tax laws impact you, contact us today to schedule a consultation.