Overview

• AB 564 reverses a planned 25% increase and locks the statewide cannabis excise rate at 15% through 2028, taking effect Oct. 1.
• The new law cancels the July 1 hike that raised the excise rate to 19% under a 2022 trigger tied to tax collection shortfalls.
• Lawmakers approved the bill with broad bipartisan support, passing 74-0 in the Assembly and 39-1 in the Senate.
• The administration is coupling the tax cut with intensified enforcement, with the Unified Cannabis Enforcement Taskforce reporting 317 tons of illegal cannabis seized since 2022, valued at about $890 million.
• Youth and public health groups warn the change could create a $200–250 million annual shortfall for programs funded by cannabis tax revenue.