Cannabis: excise tax: rate increase suspension: report.

Assembly Member Haney’s measure retools the cannabis excise tax by anchoring a brief 19 percent rate, then a subsequent 15 percent rate, and anchoring a biannual, cap‑constrained adjustment mechanism designed to align excise revenue with the level that would have been generated under the pre‑discontinuation cultivation tax. The proposal goes into effect immediately as a tax levy, while the rate schedule itself is time‑bound and driven by a data‑driven formula.

Under the plan, the 19 percent rate would apply for a narrow window in mid‑2025; following that, the rate would drop to 15 percent for the period through mid‑2028. Beginning in the 2028–29 fiscal year and every two years thereafter, the department would adjust the excise tax rate by an additional percentage, up to a 19 percent cap, to generate revenue comparable to what the weight‑based cultivation tax would have produced, with the adjustment rounded to the nearest quarter of a percent and taking effect on the following July 1. The calculation of how much revenue to target is anchored to the former cultivation‑tax framework as it existed in 2022 and relies on data such as track‑and‑trace information to inform the estimates.

The bill preserves core tax mechanics: retailers collect and remit the tax to the state, purchasers remain liable until payment, and invoices must separately itemize the excise tax. Medicinal cannabis remains exempt, and there are explicit rules for trade samples. In addition, the measure creates new reporting obligations: the administrative provisions require annual or biannual assessments of the tax‑revenue effects, and a comprehensive review by a specified date to analyze the Cannabis Tax Law’s current and future effects, its capacity to fund environmental and public‑interest programs consistent with the governing act, and options for reform. Both reporting provisions sunset on January 1, 2029, unless extended.