A bill to delay changes to California’s marijuana excise tax was unanimously approved by the Assembly Appropriations Committee yesterday in a 13 to 0 vote, sending it to the full Assembly for consideration.
Assembly Bill 564, introduced by Assemblymember Matt Haney, would push back the state’s scheduled adjustment of the marijuana excise tax rate until the 2030–31 fiscal year. Under current law, the California Department of Tax and Fee Administration is required to review and possibly raise the excise tax every two years starting in 2025 to make up for the elimination of the state’s cultivation tax. AB 564 delays that requirement by five years.
The excise tax is currently 15% of the total retail price of marijuana products, with a legal cap of 19%. The bill keeps the existing tax rate in place and preserves the system that allows future adjustments based on how much revenue the state would have collected from the repealed cultivation tax. However, those changes would now begin in 2030 instead of 2025.
The bill explicitly states that the purpose of this delay is to provide immediate tax relief to the legal marijuana industry. It also requires the California Department of Tax and Fee Administration to submit an annual report to the Legislature beginning December 1, 2026, detailing how much revenue the state has gained or lost as a result of delaying the tax adjustment.
In addition, AB 564 includes a provision stating that this section of law will expire on January 1, 2031, unless renewed.
If approved by the full Assembly, the bill will move to the Senate.
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