California’s legal cannabis market gets tax relief with new law

(FOX40.COM) —Assemblymember Matt Haney’s AB 564 came into law on Wednesday, rolling back a 25 percent tax increase on the state’s legal cannabis industry.

Video Above: Some Northern California cannabis shops say new state tax means tougher choices

The legislation reverses a cannabis tax hike of nearly 25 percent that took effect in July. While California’s cannabis industry brings in hundreds of millions in revenue annually, Haney said the market has been on a sharp decline in the past five years.

“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,” Governor Gavin Newsom said.

In some areas of the state, taxes are as high as 45 percent, allowing other states like Michigan and Colorado to surpass California’s sales despite having lower tax rates. Haney said his legislation will freeze the state excise tax rate at 15 percent until 2028.

“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,” Assemblymember Matt Haney said. “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.”