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Senate committee advances bill to pause July excise tax increase on cannabis amid industry collapse warnings
Summary
The Senate Committee on Revenue and Taxation moved AB 564, which would freeze the cannabis excise tax at 15% and delay a planned increase, after hours of testimony from cannabis business owners who said the higher tax is driving customers to the illicit market and opponents who warned it would cut funding for youth, environment and enforcement.
Assemblymember Matt Haney presented AB 564 to the Senate Committee on Revenue and Taxation, asking lawmakers to delay a scheduled increase in the state cannabis excise tax so the licensed market can stabilize.
The bill, Haney said, would “provide tax relief to California's struggling cannabis industry by reversing an unprecedented 25 percent excise tax increase,” and delay implementation to October 1 in the committee amendment the author accepted. He said California’s licensed industry now captures roughly 40 percent of the market while illegal sales account for about 60 percent, and that active licenses and sales have fallen in recent years.
Proponents included growers, retailers and…
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