California’s struggling legal cannabis sector is set to see a major tax increase in the next few weeks. However, efforts are being made to stop the legislation before it becomes law.
Last week, in an expected but no less painful blow, the California Department of Tax and Fee Administration (CDTFA) confirmed in a special notice that it ‘will increase from 15% to 19% of gross receipts from retail sales of cannabis or cannabis products’ on July 01, 2025.
To make up for the lost revenues, in 2022 the state abolished the cultivation taxes (a tax which growers previously paid). The excise tax will automatically increase after 3 years if tax revenue falls below a certain threshold.
After years of decline and stagnation in the market, taxes revenues are lower than anticipated in 2022. Whitney Economics changed its estimates for marijuana sales in each state. California had the greatest drop of $606m.
Californians will be further threatened by a price hike, as they are already struggling to compete against the illicit market.
A study conducted by the Department of Cannabis Control earlier this year showed that 60% of the total cannabis consumption was still consumed on the illegal market.
Assembly Bill 564, introduced by Assemblyman Matt Haney of San Francisco in a desperate attempt to stop this rise, seeks to suspend it.
The bill was unanimously passed by the Assembly Revenue and Taxation Committee on May 6, following a previous vote of 14-0 in the Business and Professions Committee.
The future of AB 564 now lies with the Assembly Appropriations Committee. It will be evaluated alongside other budgetary concerns on May 14th.
As the deadline approaches, industry players will appreciate the rapid pace at which AB 564 is moving, but it’s a race that has begun.
Caren W. Woodson, president of the California Cannabis Industry Association, said, “Any increase would be not only bad policy but also devastating to operators that are already in danger.”
California’s struggling legal cannabis sector is set to see a major tax increase in the next few weeks. However, efforts are being made to stop the legislation before it becomes law.
Last week, in an expected but no less painful blow, the California Department of Tax and Fee Administration (CDTFA) confirmed in a special notice that it ‘will increase from 15% to 19% of gross receipts from retail sales of cannabis or cannabis products’ on July 01, 2025.
To make up for the lost revenues, in 2022 the state abolished the cultivation taxes (a tax which growers previously paid). The excise tax will automatically increase after 3 years if tax revenue falls below a certain threshold.
After years of decline and stagnation in the market, taxes revenues are lower than anticipated in 2022. Whitney Economics re-evaluated its forecasts by US state for marijuana sales last month. California experienced the greatest drop of $606m.
Californians will be further threatened by a price hike, as they are already struggling to compete against the illicit market.
A study conducted by the Department of Cannabis Control earlier this year showed that 60% of the total cannabis consumption was still consumed on the illegal market.
Assembly Bill 564, introduced by Assemblyman Matt Haney of San Francisco in a desperate attempt to stop this rise, seeks to suspend it.
The bill was unanimously passed by the Assembly Revenue and Taxation Committee on May 6, following a previous vote of 14-0 in the Business and Professions Committee.
The future of AB 564 now lies with the Assembly Appropriations Committee. It will be evaluated alongside other budgetary concerns on May 14th.
As the deadline approaches, industry players will appreciate the rapid pace at which AB 564 is moving, but it’s a race that has begun.
Caren W. Woodson, president of the California Cannabis Industry Association, said, “Any increase would be bad policy and devastating to operators that are already in danger.”
Cannabis Law Resources for Poland
Discover essential legal information about the cultivation of cannabis, its sale, and regulations governing medical products in Poland. You can use these resources to learn about the requirements for certifications and permissions.
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Polish News Registration and Interests of Cannabis Businesses
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Permissions for Cannabis Sales in Poland
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Authorization for Importing or Manufacturing Medical Products
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Permission for Manufacturing or Importing Medical Products
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Certificate of Good Manufacturing Practices (GMP)
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Registration of Medical Products in Poland