NORTHSTATE, Calif. — A new state bill might put a stop to an upcoming increase on cannabis tax. Assembly Bill 564 would prevent a 25% cannabis tax increase set for July 2025.

Assemblymember Matt Haney, a Democrat from San Francisco, introduced the bill. Haney’s office said in a press release that raising tax rates would harm the state’s legal cannabis industry while pushing more people to shop through the illicit market.

Asm. Haney spoke alongside industry leaders on March 24 at the California State Capitol to advocate for the proposal.

“We can either support this legal industry, these small businesses, to be able to build the thriving cannabis industry that we know California can grow, or we can tax or overregulate this industry to death,” Haney said.

He added, “If you keep on taxing and taxing a set of businesses that are already competing with folks who are paying no taxes, eventually those folks are going to go out of business entirely, and you’re not going to get anything.”

The bill follows the Redding City Council approving a cannabis business tax boost earlier in March, including raising the retailer’s initial rate from 5% to 6% of gross receipts.

Laythen Martines is a founder of the Sundial Collective dispensary, which has a location in Redding. He told KRCR the higher taxes, which the bill would help stop, are unfair and going against business owners.

Martines is also in communication with other cannabis retailer players, telling the Northstate’s News they’re hoping to get a flat tax passed in the future.

“We pay sales tax, and you pay an extra 5% cannabis tax. But don’t tax us 19% is the proposal, and then tax us 6% at the city level, and then tax us 7.25% for sales tax,” Martines said. “That’s… It’s just unethical.”

During the March 24 press conference, Assemblymember Haney said he wants to see an early stop to the tax increase, but if not before July, he still hopes the bill becomes law as quickly as possible.