Californians are expected to pay more for cannabis this summer. Here’s why
May 2, 2025
Californians will face a higher excise tax on cannabis as it rises from 15% to 19% on July 1.
SACRAMENTO, Calif. — Californians hoping to take a toke this summer will have to dig deeper into their wallet as the excise tax for cannabis is increasing for the first time since its inception.
The California Department of Tax and Fee Administration announced the current 15% tax will increase to 19% on July 1.
State law requires this increase, and the CDFA must adjust the rate every two years thereafter. The increase was added after the cultivation tax was eliminated in 2022. The increased tax percentage supplements some of the funds lost by eliminating the cultivation tax.
The tax applies to all cannabis and cannabis products purchased by consumers at dispensaries. It is added after the local cannabis business taxes are applied to the receipt. However, the tax increase comes as the industry has reported declining sales.
In 2024, the California excise tax generated nearly $595 million for the state. The money is distributed to programs for child development, substance abuse prevention and environmental recovery.
While the tax increase is only months away, a bill is making its way through the legislature that would keep the tax rate at 15%.
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