California Assembly Votes Unanimously to Block Cannabis Tax Hike

The California Assembly voted unanimously (74-0) on Monday to advance a
bill blocking a nearly 25% tax hike on the state’s legal cannabis industry
that is set to take effect July 1, CBS News reports. The bill, AB564, moves
next to the Senate for consideration.

The proposal was introduced by Assemblymember Matt Haney (D), who noted
that “If we continue to pile on more taxes and fees onto our struggling
small cannabis businesses, California’s cannabis culture is under serious
threat of extinction.”

“If we want to support our cannabis industry that drives millions of
visitors to California every year, adding more costs makes absolutely no
sense.” — Haney, in a statement, via CBS News

The anticipated tax hike — announced earlier this year by the California
Department of Tax and Fee Administration — is attached to a 2022 law that
removed a blanket cultivation tax but included rules to raise the tax rate
if the state’s cannabis revenues start to fall, which they have.

Meanwhile, the legal cannabis market continues to struggle against strict
regulations, competition from unlicensed retailers, and already high taxes.

“Nearly a decade after Californians overwhelmingly approved cannabis
legalization, the industry is struggling under the crushing weight of a 15%
excise tax,” Caren Woodson, president of the California Cannabis Industry
Association, said in the report. “Any increase, particularly a 25%
increase, would not only be bad public policy, but devastating to operators
already on the brink.”