California Governor Gavin Newsom has signed AB 564 into law, pausing a 25% tax increase on marijuana products for five years. This rollback aims to support the legal cannabis market, ensure consumer access to safe products, and benefit local communities by helping legal businesses compete against the illicit market. The bill received bipartisan support and is expected to provide immediate tax relief to the industry. The California Department of Tax and Fee Administration will adjust the cannabis excise tax rate to generate revenue equivalent to the previously collected cultivation tax. The state will also submit annual reports detailing the impact of the tax reduction. Other related legislative efforts in California include integrating hemp-derived cannabinoids into the state's marijuana program and exploring grants for public education and community reinvestment.

California Governor Signs Bill Rolling Back Recent Cannabis Tax Increase

Sep 22, 2025

Source:

Kyle Jaeger

Marijuana Moment

California Governor Gavin Newsom just threw a major lifeline to the state’s legal weed scene by signing AB 564 into law. This move effectively pauses a 25% excise tax hike that had recently kicked in, freezing rates for the next five years. For a market that’s been struggling to stay afloat against high overhead and stiff competition from the illicit market, this rollback is a breath of fresh air. Supporters hope the move will keep small businesses open and ensure that legal, tested products remain accessible to the community.

This is a huge win for everyday tokers because it directly impacts the price you pay at the counter. When taxes skyrocket, it’s usually the consumer who feels the pinch or gets driven back to unregulated sources. By keeping these costs in check, the state is making it easier for fans of the plant to stick with the legal market, supporting local jobs and ensuring your stash stays safe and consistent. It’s a solid step toward a more sustainable and affordable cannabis culture.

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