Bill > AB564

This bill modifies the cannabis excise tax structure in California by adjusting tax rates and mandating future studies of the cannabis market. From July 1, 2025, to September 30, 2025, the cannabis excise tax will remain at 19%, but it will then decrease to 15% from October 1, 2025, to June 30, 2028. Beginning in the 2028-29 fiscal year, the Department of Tax and Fee Administration will again be required to adjust the tax rate to generate revenue equivalent to what was previously collected through the discontinued cultivation tax, with a maximum rate of 19%. The bill also requires the Department of Cannabis Control (DCC) to submit a report to the Legislature by October 1, 2027, analyzing the current and future effects of the Cannabis Tax Law on the regulated cannabis market, assessing its revenue generation potential, and recommending potential changes to accomplish the original goals of the Control, Regulate and Tax Adult Use of Marijuana Act (AUMA). Additionally, the California Department of Tax and Fee Administration must submit annual reports detailing the estimated gain or loss in cannabis excise tax revenues resulting from the tax rate reduction. The bill is designed to provide tax relief to the cannabis industry while maintaining a framework for ongoing market evaluation and potential future adjustments.

Budget and Finance, Business and Industry

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260AB564