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Newsom signs law rolling back state’s cannabis tax

KALW | By Sunni Khalid
Published September 22, 2025 at 2:41 PM PDT
Cannabis edibles
Elsa Olofsson
/
Flickr / Creative Commons
Cannabis edibles

Governor Gavin Newsom signed a law earlier today that rolls back the 25-percent tax on cannabis.

The bill was introduced in February by Assemblymember Matt Haney, of San Francisco. Under the legislation, the state will return to a 15-percent tax on cannabis products starting next month through 2028.

The tax rate was set to increase under a part of Newsom’s budget passed three years ago, as a way to make up for lost revenues.

California has the largest legal regulated cannabis industry in the world, but

Illegal sales make up 60 percent of the state’s total market. 

Haney said the legislation was needed to give the state’s legal cannabis industry a fair chance to compete against the untaxed and illegal cannabis markets.

Last year, sales tax on cannabis generated less than five billion dollars. But that was down nearly a billion dollars from tax revenue in 2021.
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Sunni Khalid
Sunni M. Khalid is a veteran of more than 40 years in journalism, having worked in print, radio, television, and web journalism.
See stories by Sunni Khalid