New Law Eases Taxes for California Cannabis Companies

California cannabis businesses are experiencing another major shift as Governor Gavin Newsom signed Assembly Bill 564, rolling back cannabis taxes beginning October 1. This change reverses the summer hike that raised excise taxes from 15% to 19%, bringing them back down to 15% through 2028. Supporters say the new policy is a lifeline for dispensaries and growers, while critics fear the loss in tax revenue could hurt public programs.

The California cannabis industry has been under pressure for years. High taxes have been blamed for pushing consumers into the unregulated market, where products are not tested or monitored. By reducing taxes, the state hopes to keep more shoppers at licensed dispensaries and protect thousands of jobs tied to California cannabis cultivation and retail. Many brands in the state argue that the cost burden created by high taxes was making it impossible to survive.

Lower taxes mean shops can offer more competitive prices, making legal products more attractive than illicit ones. This shift could strengthen the regulated market, increase safety standards, and keep small businesses afloat. For many owners, this is the relief the California cannabis industry desperately needs.

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