California: Governor Newsom signs legislation cutting taxes on cannabis, promoting the long-term success of the legal industry
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~ On September 22, 2025, Governor Gavin Newsom of California signed legislation that will have a significant impact on the state's legal cannabis industry. The new law, AB 564 (Haney), eliminates a 25% tax increase on the industry and sets the state's cannabis excise tax rate at 15% until 2028. This move is part of the governor's ongoing efforts to ensure the long-term success of the legal cannabis market in California.

In a statement, Governor Newsom expressed his belief that this tax cut will help the legal market continue to grow and thrive while also providing consumers with access to safe products. He also emphasized the importance of supporting local communities through this decision.

The bill was introduced by Assemblymember Matt Haney (D-San Francisco), who believes that it will level the playing field for legal businesses and protect California jobs. He stated that this change will allow the legal market to compete against the untaxed and unregulated illegal market, as intended by voters.

California's regulated cannabis market is currently the largest in the world and has numerous benefits for the state, including environmental stewardship, compliance-tested products, fair labor practices, economic growth, and funding for vital programs in education, public health, and environmental protection.

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The governor's administration has also taken steps to strengthen enforcement efforts against illegal operators by using cannabis tax revenue to fund civil and criminal enforcement activities. This will reduce the burden on legal businesses while ensuring sustained actions against illegal operators. Additionally, local jurisdictions are now eligible for grants from the Board of State and Community Corrections (BSCC) to enhance their own enforcement efforts against illegal cannabis activity.

Since its establishment in 2022 by Governor Newsom, the Unified Cannabis Enforcement Taskforce (UCETF) has seized and destroyed over 317 tons of illegal cannabis worth an estimated retail value of $890 million through nearly 230 multiagency operations. The task force, which includes state, local, and federal partners, has enhanced collaboration and enforcement coordination to combat illegal cannabis activity. Some of the partners on the task force include the Department of Cannabis Control, the Department of Pesticide Regulation, the Department of Toxic Substances Control, and the Department of Fish and Wildlife.

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To learn more about California's legal cannabis market, state licenses, and laws, individuals can visit cannabis.ca.gov.

In other recent news from Governor Newsom's administration, it was announced that funding will be provided for 30 affordable housing projects across California to create over 2,000 homes for families. This is part of the governor's strategy to increase housing availability and affordability in the state.

Additionally, Governor Newsom has signed laws to protect school children and hospital patients from tactics used by Trump's federal "secret police" force. These measures aim to limit fear tactics used by these forces to terrorize communities.

Finally, an emergency proclamation was issued by Governor Newsom on September 19th to assist in recovery efforts for Calaveras and Tuolumne Counties following the TCU Lightning Complex Fires that burned over 13,000 acres and destroyed or damaged over 100 structures and homes. This proclamation will provide much-needed support for these communities as they work towards recovery.

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