TO: BOARD OF SUPERVISORS
FROM: Executive Office
MEETING DATE: September 9, 2025
DEPARTMENT CONTACT:
Supervisor John Haschak
PHONE:
707-463-4221
DEPARTMENT CONTACT:
Kelly Hansen
PHONE:
707-463-4441
ITEM TYPE: Consent Agenda
TIME ALLOCATED FOR ITEM: N/A
AGENDA TITLE:
title
Ratification of Letter of Support for Assembly Bill 564 (Haney) - Cannabis: Excise Tax: Rate Increase Repeal
(Sponsor: Supervisor Haschak)
End
RECOMMENDED ACTION/MOTION:
recommendation
Ratify letter of support for Assembly Bill 564 (Haney) - cannabis: excise tax: rate increase repeal.
End
PREVIOUS BOARD/BOARD COMMITTEE ACTIONS:
The Board of Supervisors regularly issues support letters that align with the 2025 Legislative Platform. These letters advocate for adequate and ongoing federal and state funding, timely distribution of resources, increased local authority, and flexibility in administering and providing services.
SUMMARY OF REQUEST:
AB 654 would repeal the scheduled increase of California's cannabis excise tax from 15% to 19% which took effect July 1, 2025, and freeze the excise tax rate at 15% through June 30, 2031.
According to the bill's author, AB 654 supports the stability and viability of the legal cannabis market by reducing the financial burden on licensed operators, particularly small, equity and rural cultivators, struggling to remain competitive against the illicit market. According to state analysis only about 40% of cannabis consumed in California is purchased legally, with the remainder coming from unregulated sources that avoid taxes and compliance costs.
The excise tax increase, if allowed to remain in effect, is projected to reduce long term legal sales and tax revenue, further destabilizing the regulated market. By returning to the 15% tax rate, AB 564 aims to assist licensed cannabis businesses by improving legal market competitiveness by reducing the cost disparity between legal and illegal products and sustain long-term state and ...
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