California has paused a planned increase in its marijuana excise tax until October 2028, with Governor Gavin Newsom signing the tax relief legislation. This move aims to help the legal cannabis market compete against the illicit market and ensure consumer access to safe products. The excise tax rate had increased from 15 to 19 percent on July 1, prompting industry concerns. The new law requires the California Department of Tax and Fee Administration to adjust the excise tax rate to generate equivalent revenue to the former cultivation tax. The state is also supporting cannabis and psychedelics research, and has distributed over $52 million in community reinvestment grants funded by marijuana tax revenue.

California Cannabis Tax Cut Goes Into Effect with Further Delay on Increase

Oct 1, 2025

Source:

Kyle Jaeger

Marijuana Moment

California cannabis fans just got a much-needed break from the taxman. After a recent jump in the state excise tax from 15% to 19% threatened to make legal buds even pricier, a new law has officially hit the pause button on that increase. This relief, signed into law recently, ensures that the higher tax rate is shelved until at least October 2028. The idea is to give the legal market a fair shot at competing with the underground scene while helping the small businesses we love stay in the game.

This is a massive win for everyday tokers because lower taxes generally mean more reasonable prices at the dispensary counter. When the state stops squeezing the industry, it becomes much easier for your favorite craft cultivators to survive and for you to keep supporting the community without breaking the bank. It’s a refreshing sign that officials are finally recognizing that over-taxing legal weed only hurts the people trying to do things the right way.