WeVote
Log In

Bill

Bill

AB 564

Cannabis: excise tax: rate increase suspension: report.

2025-2026 Regular Session Introduced by Matt Haney and 2 co-sponsors

California suspends an automatic cannabis excise tax increase while requiring analysis of the tax's economic and social effects before future rate adjustments.

Chaptered by Secretary of State - Chapter 127, Statutes of 2025.
#cannabis #excisetax #rateincreasesuspension #report
0
WeVote Research Nonpartisan
Bill Summary · AB 564

Legislative bill overview

AB 564 suspends an automatic increase to California's cannabis excise tax and requires the state to submit a report analyzing the tax's economic and social impacts. The bill delays the tax rate adjustment that would have otherwise taken effect, giving policymakers time to evaluate the tax's effects on the legal cannabis market and consumers.

Why is this important

California's cannabis excise tax significantly affects product prices and consumer behavior, influencing whether buyers use legal versus illegal markets. A suspension with mandatory analysis allows legislators to make data-driven decisions about tax policy rather than allowing automatic increases to proceed without evidence of their impact on public health, equity, and market viability.

Potential points of contention

  • Tax revenue impact: Suspending the excise tax increase reduces state cannabis tax revenue during a period of tight state budgets, affecting funding for cannabis regulation, environmental restoration, and social equity programs
  • Market competitiveness: Lower taxes may benefit legal retailers competing against illicit operations, but could also reduce funding for enforcement and compliance programs that support legal market integrity
  • Equity concerns: Cannabis tax revenue historically funds social equity programs for communities harmed by cannabis criminalization; a tax suspension could reduce resources available for these communities unless alternative funding is secured

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.