California activists are urging lawmakers to pass a bill this week to delay the implementation of an planned hike on marijuana taxes—a policy change advocates argue would detract from efforts to mitigate the illicit market.

The tax increase that Gov. Gavin Newsom (D) signed into law would raise the rate from 15 percent to 19 percent, effective July 1. But under legislation from Assemblymember Matt Haney (D), that increase would be delayed for five years to give legislators more time to consider the issue.

The Assembly is expected to take up the measure this week, but advocates are hoping to see its language incorporated into a separate budget trailer bill that would take effect upon enactment—as opposed to the beginning of next year under Haney’s bill.

“So far, we’ve been gratified by the very strong support we have seen in the committee on this,” Dale Gieringer, director of California NORML, told Marijuana Moment on Monday. “We’re hopeful for a positive outcome.”

“California NORML is proud to have taken a leadership roll sponsoring this bill, and I’m being joined by co-sponsors across the spectrum here,” he said.

While the legislation as introduced would have outright repealed the proposed tax hike, it’s since been amended to delay its implementation until the 2030-2031 fiscal year.

“Cannabis is already heavily over-taxed relative to comparable products like beer, wine, and tobacco in California,” California NORML said in an alert to supporters, urging them to contact their representatives to support Haney’s bill.

“The industry needs a tax decrease, not an increase. The industry is struggling to compete against overtaxation, the illicit market, resistance to local licensing, and the proliferation of hemp-derived products. Medical marijuana patients in particular are unable to meet their needs for cannabis products under current pricing.”

Under the legislation, the California Department of Tax and Fee Administration (CDTFA), working with the Department of Finance, would be required to “adjust the cannabis excise tax rate upon purchasers of cannabis or cannabis products” based on the “additional percentage of the gross receipts of any retail sale by a cannabis retailer that the department estimates will generate an amount of revenue equivalent to the amount that would have been collected in the previous fiscal year,” the bill text says.

The department would need to “estimate the amount of revenue that would have been collected in the previous fiscal year pursuant to the weight-based cultivation tax” and “estimate this amount by projecting the revenue from weight-based cultivation taxes that would have been collected in the previous calendar year based on information available to the department.”

“The specific goal of the cannabis excise tax rate reduction is to provide immediate tax relief to the cannabis industry,” the measure states. “The efficacy of this goal may be measured by the Legislature by the amount of gain or loss in cannabis excise tax revenues resulting from the cannabis excise tax rate reduction allowed by this act.”

It also mandates that CDTFA, on or before December 1, 2026 and each subsequent year the California “submit a report to the Legislature…detailing the amount of gain or loss in cannabis excise tax revenues resulting from the cannabis excise tax rate reduction allowed by this act.”

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Meanwhile, California officials last month awarded another round of community reinvestment grants to nonprofits and local health departments, funded by marijuana tax revenue.

California’s Supreme Court separately delivered a victory for the state’s marijuana program last month, rescinding a lower court ruling in a case that suggested federal prohibition could be used locally to undermine the cannabis market.

The state Supreme Court ruling also came just weeks after California officials unveiled a report on the current status and future of the state’s marijuana market—with independent analysts hired by regulators concluding that the federal prohibition on cannabis that prevents interstate commerce is meaningfully bolstering the illicit market.

Newsom did sign a bill in 2022 that would have empowered him to enter into interstate cannabis commerce agreements with other legal states, but that power was incumbent upon federal guidance or an assessment from the state attorney general that sanctioned such activity.

Meanwhile, a California Senate committee recently declined to advance a bipartisan bill that would have created a psilocybin pilot program for military veterans and former first responders.

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