Categories: California News

Newsom signs AB 564 cutting taxes on cannabis, focusing on long-term success of industry

(FOX40.COM) — Gov. Gavin Newsom signed AB 564 on Monday, which eliminates a 25% tax increase on California’s legal cannabis industry to allow the success of the legal cannabis market.
• Video above: Sacramento City Council weighed its options regarding Cannabis Consumption Lounges

Assemblymember Matt Haney (D–San Francisco) authored AB 564 to regulate the cannabis market, fostering environmental stewardship, compliance-tested products, and fair labor practices, while focusing on driving the economic growth and funding vital programs in education, public health, and environmental protection, according to Newsom.

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“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 Haney. “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.”

The legislation focuses on reserving the percentage tax increase on California’s legal cannabis industry and sets the state’s cannabis excise tax rate at 15% until 2028, Newsom said.

Newsom said in a press release that this allows the legal businesses to remain competitive, which helps the industry in the long term.

“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,” according to Newsom.

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Newsom said this will reduce the burden on legal businesses while ensuring sustained actions against illegal operators.

On top of that, Newsom stated the Board of State and Community Corrections has granted eligibility to local jurisdictions, especially those allowing retail access, to further enhance and support local enforcement efforts against illegal cannabis activity. 

To learn more about the legal California cannabis market, state licenses, and laws, click here.

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