Democratic Gov. Gavin Newsom has signed legislation (Assembly Bill 564) into law halting a recently-enacted excise tax hike on commercially available cannabis products. The law takes effect on October 1st.
The new law rolls back a 25 percent tax hike that took effect on July 1st. It also pauses future tax hikes on retail adult-use cannabis products until June 30, 2028.
“We’re rolling back this cannabis tax hike so the legal market can continue to grow, consumers can access safe products, and our local communities see the benefits,” Gov. Newsom said in a press release.
California NORML is among the advocacy organizations that spearheaded the bill. In March, it coordinated a lobby day and press conference at the state capital in support of AB. 564 — which is also backed by the United Food and Commercial Workers – Western States Council, the California Cannabis Industries Association, and other groups. In the past months, California NORML and NORML generated over 10,000 letters and e-mails to state lawmakers in support of AB 564.
“California NORML is proud to have taken a leadership role sponsoring this bill,” California NORML Coordinator Dale Gieringer said. “Cannabis is already heavily over-taxed relative to comparable products like beer, wine, and tobacco in California.”
Earlier this year, Maryland lawmakers approved a budget bill increasing the special sales tax imposed upon cannabis-related goods from 9 percent to 12 percent. In June, Minnesota lawmakers approved a similar tax hike. Earlier this month, lawmakers in Michigan expressed support for a proposed tax hike.
NORML has criticized these and other exorbitant tax hikes on adult-use cannabis products. NORML’s Deputy Director Paul Armentano said: “Consumers in many legal states already pay artificially high prices for retail cannabis products. Imposing additional taxes on these goods undoubtedly drives prices out of reach for some consumers. This pushes consumers back to the unregulated market, thereby undermining the primary goal of legalization, which is to provide adults with safe, affordable, above-ground access to lab-tested products of known purity, potency, and quality.”
Additional information is available from California NORML.