The legal cannabis market is in crisis, with declining sales, widespread business closures, and plummeting tax revenue. Assembly Bill 564 (Haney) restores the excise tax rate from 19% to 15%, a critical step to protect public health and stabilize the legal market. This bipartisan legislation has received widespread support in both chambers and from Governor Newsom.

• “Legal cannabis businesses saw an over 10% drop in sales last year, the city of Los Angeles’s cannabis department says, which most analysts say is a result of price-undercutting by old-fashioned, unlicensed weed dealers.” (LA Daily News)
• “California’s cannabis market has suffered 15 consecutive quarters of revenue decline, prompting urgent calls for tax reform… It was a warning sign 12 quarters ago. This is an industry imploding.” (North Bay Business Journal)
• “Revenues from legal sales of cannabis are already dropping, and if we keep raising the tax, they’ll drop even more. That penalizes cannabis businesses that are doing the right thing and working within the legal market. And, it makes illegal sales from cartels and criminals more competitive… If we want to supplement education and youth programs, cannabis tax dollars will only exist if we steady the legal market and go after those illegal operators.” (Assembly Majority Leader Cecilia Aguiar-Curry (D-Winters)
• "We can both support the legal cannabis industry and protect child care. If the measure reaches the governor’s desk and is signed into law, we will work with the Legislature to ensure there are no cuts to child care due to this policy change.” (Diana Crofts-Pelayo, a spokesperson for Governor Newsom)

The choice is clear: Pass AB 564 to protect the legal cannabis market AND the programs it funds, or watch both collapse together under the weight of unsustainable taxation.

Learn more at cacoa.org/dont-raise-taxes