Cannabis: excise tax: rate increase repeal.

Assembly Member Haney's proposal to stabilize California's cannabis excise tax rate would eliminate scheduled adjustments to the current 15% levy on retail sales. The legislation maintains the existing rate structure while removing provisions that would have required the California Department of Tax and Fee Administration to periodically modify the rate starting in fiscal year 2025-26.

The bill preserves core elements of the state's cannabis tax framework, including retailers' responsibility to collect and remit the excise tax, documentation requirements, and exemptions for medical cannabis donations and trade samples. These taxes remain separate from and additional to state and local sales taxes. The measure retains existing provisions that make purchasers liable for the tax until paid and require retailers to separately state the excise tax amount on receipts.

This change would reverse a key component of Assembly Bill 195 (2022), which eliminated the state's cannabis cultivation tax but directed officials to adjust the excise rate every two years to recover equivalent revenue. Under current law, those adjustments could have raised the rate as high as 19% of gross retail receipts. By maintaining the 15% rate, the new legislation removes the mechanism designed to offset revenue losses from discontinuing the cultivation tax.