California Gov. Gavin Newsom signed into law a bill that reverses a cannabis excise tax increase that took effect earlier this year.

The bill, A.B. 564, lowers the tax rate for cannabis products back to 15% starting Oct. 1, 2025, through the 2028-2029 fiscal year. The cannabis tax rose to 19% in July, stemming from a 2022 measure that eliminated a cannabis cultivation tax but required the excise tax rate to increase to make up lost revenue.

Proponents of the new law, signed Monday, argued the increased tax hobbled the legal cannabis industry and funneled buyers into the illegal …