CaliforniaCannabis: excise tax: rate increase suspension: report.
What it does
Existing law, the Control, Regulate and Tax Adult Use of Marijuana Act (AUMA), an initiative measure, authorizes a person who obtains a state license under AUMA to engage in commercial adult-use cannabis activity pursuant to that license and applicable local ordinances. The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities and establishes the Department of Cannabis Control (DCC) within the Business, Consumer Services, and Housing Agency to administer the act.
More detail
Existing law, the Cannabis Tax Law, imposes an excise tax upon purchasers of cannabis or cannabis products sold in this state at the rate of 15% of the gross receipts of any retail sale by a cannabis retailer, and, as enacted by AUMA, imposed a cultivation tax on all harvested cannabis that entered the commercial market, as specified. Chapter 56 of the Statutes of 2022 (AB 195) amended AUMA to, among other things, discontinue the imposition of the cultivation tax on July 1, 2022. AB 195, beginning in the 2025–26 fiscal year and every 2 years thereafter, requires the California Department of Tax and Fee Administration (CDTFA) to adjust the cannabis excise tax rate by a percentage that will generate an amount of revenue that would have been collected pursuant to the cultivation tax imposed prior to its discontinuation, as specified, not to exceed 19% of the gross receipts of retail sale. Pursuant to that law, the department increased the cannabis excise tax rate to 19% for the 2025–26 fiscal year.
This bill would revise the above-described provisions governing the cannabis excise tax rate. Specifically, the bill, for the period from July 1, 2025, to September 30, 2025, inclusive, would retain the existing cannabis excise tax rate of 19%. For the period from October 1, 2025, to June 30, 2028, inclusive, the bill would decrease the excise tax rate to 15%. Beginning in the 2028–29 fiscal year and every 2 years thereafter, the bill would require the department to adjust the cannabis excise tax rate by a percentage that will generate an amount of revenue that would have been collected pursuant to the cultivation tax imposed prior to its discontinuation, as specified, not to exceed 19%. The bill would also require the DCC, in consultation with the CDTFA and the Legislative Analyst's Office, on or before October 1, 2027, to submit a report to the Legislature that analyzes, among other things, the current and future effect of the Cannabis Tax Law on the regulated cannabis market and recommends options for changes to the Cannabis Tax Law to accomplish the intent of AUMA.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill also would include additional information required for any bill authorizing a new tax expenditure.
This bill would take effect immediately as a tax levy.
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Where it stands
- Introduced
- Passed Assembly
- Passed Senate
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2025
- Sep 22Chaptered by Secretary of State - Chapter 127, Statutes of 2025.Latest
- Sep 22Approved by the Governor Gavin Newsom.Became Law
- Sep 17Enrolled and presented to the Governor at 3:30 p.m.To Governor
- Sep 11Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 76. Noes 0. Page 3294.).Major
- Vote recorded AB 564 Haney Concurrence in Senate Amendments. Result: pass.Lower
- Sep 10In Assembly. Concurrence in Senate amendments pending.
- Vote recorded 3rd Reading AB564 Haney et al. By Cabaldon. Result: pass.Upper
- Sep 10Read third time. Passed. Ordered to the Assembly. (Ayes 39. Noes 1. Page 2809.).Passed Senate
- Sep 8Read second time. Ordered to third reading.Minor
- Sep 5Read third time and amended. Ordered to second reading.Major
- Sep 3Read second time. Ordered to third reading.Minor
- Sep 2Read second time and amended. Ordered returned to second reading.Major
- Sep 2From committee: Amend, and do pass as amended. (Ayes 7. Noes 0.) .Major
- Aug 29
- Vote recorded Do pass as amended. Result: pass.Upper
- Aug 18In committee: Referred to suspense file.Minor
- Vote recorded Placed on suspense file. Result: pass.Upper
- Jul 10Read second time and amended. Re-referred to Com. on APPR.Major
- Jul 9From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 5. Noes 0.) (July 9).Major
- Vote recorded Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations]. Result: pass.Upper
- Jun 11Referred to Com. on REV. & TAX.Minor
- Jun 3In Senate. Read first time. To Com. on RLS. for assignment.Minor
- Jun 2Read third time. Passed. Ordered to the Senate. (Ayes 74. Noes 0. Page 1842.)Passed Assembly
- Vote recorded AB 564 Haney Assembly Third Reading. Result: pass.Lower
- May 27Read second time. Ordered to third reading.Minor
- May 23From committee: Do pass. (Ayes 13. Noes 0.) (May 23).Minor
- Vote recorded Do pass. Result: pass.Lower
- May 14In committee: Set, first hearing. Referred to suspense file.Minor
- May 8Re-referred to Com. on APPR.Minor
- May 7Read second time and amended.Major
- May 6From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 6. Noes 0.) (May 5).Major
- May 5In committee: Set, first hearing. Referred to REV. & TAX. suspense file.Minor
- Vote recorded Do pass as amended and be re-referred to the Committee on [Appropriations]. Result: pass.Lower
- Apr 22From committee: Do pass and re-refer to Com. on REV. & TAX. (Ayes 14. Noes 0.) (April 22). Re-referred to Com. on REV. & TAX.Minor
- Vote recorded Do pass and be re-referred to the Committee on [Revenue and Taxation]. Result: pass.Lower
- Mar 10Re-referred to Coms. on B. & P. and REV. & TAX. pursuant to Assembly Rule 96.Minor
- Feb 24Referred to Coms. on REV. & TAX. and B. & P.Minor
- Feb 13From printer. May be heard in committee March 15.
- Feb 12Read first time. To print.Introduced