California Assembly Unanimously Halts Legal Cannabis Tax Hike

California lawmakers have unanimously approved Assembly Bill 564 to pause a planned 25% increase in the state's cannabis excise tax scheduled for July 1. The bill, introduced by Assemblymember Matt Haney, freezes the excise tax at 15%, aiming to protect struggling legal cannabis businesses from being pushed out by heightened taxation and competition from the black market. Industry leaders warn that higher taxes could devastate the legal cannabis sector, which is already facing declining sales and tax revenue, and could inadvertently boost illicit market activity. Haney emphasized the importance of supporting the legal cannabis industry, which attracts millions of visitors and contributes significantly to California's economy. The legislation follows concerns that California's heavily taxed market contrasts with other states like Michigan, which report growth due to lower taxes and fewer regulatory barriers. AB564 now moves to the State Senate for consideration.