California's cannabis excise tax is scheduled to increase over 25% (from 15% to 19%) on July 1, 2025. This will accelerate the ongoing market collapse, drive more consumers to the illicit market, and (ironically) reduce overall tax revenue.

It would put public health and safety at greater risk, as the tax increase is sure to drive even more Californians to the illicit market, where products are unregulated, often dangerous, and untaxed, and where more than 60% of cannabis sales already take place.

The tax increase is also fiscally counterproductive. Research shows that cannabis consumers are highly price-sensitive: even a 1% differential in price can drive consumers away from the legal market (Reason Foundation). A 25%+ tax increase would accelerate this trend, and based on economic modeling, even a modest 10% drop in legal sales due to this tax increase would result in a multi-million-dollar net revenue loss for the state.

Lastly, the tax increase is ill-timed. For nearly five years, California’s licensed cannabis market has been in a steep decline. From Q2 2021 to Q4 2024, taxable sales were down by 34%, and taxes (excise + sales) were down by 31%. The agency projected $603 million in excise tax revenue for FY 2024-25, yet actual revenue declined further to $594 million in 2024.

Please join the California Cannabis Operators Association and urge your state Senator to include a 15% freeze on the cannabis excise tax in the 2025 Budget Act trailer bill.

MAKE YOUR VOICE HEARD TODAY!

(LEARN MORE: https://www.cacoa.org/freeze-the-tax)