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Industry witnesses warn higher excise taxes and fees will further squeeze legal cannabis businesses

2571068 · March 11, 2025
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Summary

Industry trade groups, manufacturers and small-farm representatives told legislators a potential excise tax increase, high licensing fees, grant delays and retail bans are worsening the financial strain on licensed cannabis businesses and hindering equity goals.

Industry groups, manufacturers and local trade associations told a legislative joint hearing that high taxes, licensing costs, limited retail access and delays in equity grant administration threaten the financial viability of licensed cannabis businesses across California.

Pam Jenkins of the California Cannabis Operators Association told the committee the department—9s report painted an "overly optimistic" picture and highlighted falling excise-tax revenue, declining taxable sales and the loss of manufacturers. "Excise tax revenue has dropped by nearly $88,000,000 (13%) since 2021," she said on behalf of member storefronts and vertically integrated operators, and she urged lawmakers to avoid a proposed excise-tax increase.

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