A measure to temporarily stop a recent tax hike on cannabis products in California has cleared the legislature and now awaits the governor’s decision.
The Assembly voted unanimously, 57-0, to accept amendments made in the Senate to the bill by Assemblymember Matt Haney. With that vote, the measure now heads to Governor Gavin Newsom, who has until October 12 to either sign or reject it.
If enacted, the bill would stop the increase in cannabis excise taxes for five years. Haney said the change is designed to give relief to an industry already dealing with high costs, reversing what he called an “unprecedented” 25% increase. Lawmakers from both parties have strongly backed the measure throughout the process.
One of the changes approved in the Senate pushes back the starting date to October rather than having the pause take effect immediately. The tax hike took effect in July, following state officials’ announcement in June that the marijuana excise tax would increase from 15% to 19%. At the time, supporters of the industry had hoped that ongoing budget discussions would include a freeze similar to Haney’s measure, but those talks fell short.
Although Newsom and Assembly Speaker Robert Rivas supported including a freeze in the budget process, Senate leader Mike McGuire reportedly opposed the move, leaving Haney to continue advancing his separate bill.
Haney’s measure originally would have locked in the lower 15% rate until 2030, with the California Department of Tax and Fee Administration (CDTFA) adjusting rates afterward every two years. Regulators would have been required to set tax levels to generate revenue comparable to what the state used to collect from the discontinued cultivation tax, but not above 19%.
The Senate Appropriations Committee later scaled back that timeline, shortening the period at the lower rate and adding requirements for annual reporting. Under the revised bill, the CDTFA, working in conjunction with the Finance Department, must determine tax adjustments annually.
They are tasked with estimating how much revenue the old cultivation tax would have generated and then setting the excise rate to raise a similar amount from retail cannabis sales.
The law’s stated purpose is to provide immediate financial relief for marijuana operators. To measure whether the change is effective, CDTFA will need to submit annual reports to the Legislature starting in December 2026, outlining gains or losses in tax revenue compared to expectations.
Separately, the Senate Appropriations Committee recently advanced another bill to regulate hemp-derived cannabinoids in California. That legislation would bring hemp-based products into the state’s cannabis framework, prohibit synthetic cannabinoids, and clarify rules for hemp items such as topical salves. The same committee also backed a measure allowing licensed cannabis microbusinesses to ship products directly to patients.
Most likely, other licensed firms like Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) operating in other states would appreciate any efforts taken to provide some relief from the heavy tax load that they carry.
About CNW420
CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of an article each business day at 4:20 p.m. Eastern – a tribute to the time synonymous with cannabis culture. The concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.
To receive SMS alerts from CNW, text CANNABIS to 888-902-4192 (U.S. Mobile Phones Only)
For more information, please visit https://www.CannabisNewsWire.com
Please see full terms of use and disclaimers on the CannabisNewsWire website applicable to all content provided by CNW, wherever published or re-published: https://www.CannabisNewsWire.com/Disclaimer
CannabisNewsWire
Denver, CO
www.CannabisNewsWire.com
303.498.7722 Office
Editor@CannabisNewsWire.com
CannabisNewsWire is powered by IBN
