An American Heart Association study has found that daily marijuana use is linked to a significantly higher risk of heart attack and stroke. And the increased danger exists whether users smoke, vape or eat their cannabis products.
Sacramento, California – California’s struggling legal cannabis industry was dealt another blow Thursday when state officials announced the excise tax on legal marijuana will jump from 15% to 19% starting July 1. The 26% hike—pushed forward under a 2022 law signed by Gov. Gavin Newsom—will bring the tax to the maximum rate allowed by the state and has already drawn fierce criticism from industry leaders.
The announcement, made during a cannabis advisory meeting by the California Department of Tax and Fee Administration, comes at a time when the state’s licensed cannabis businesses are already reeling from plummeting revenue, overwhelming regulatory costs, and fierce competition from the booming illegal market.
Ironically, the tax hike is happening precisely because the legal market is struggling. Under the 2022 law, the state removed the cultivation tax to ease pressure on growers but required the excise tax rate to be raised if cannabis tax revenue dropped. That trigger has now been met.
Jerred Kiloh, president of the United Cannabis Business Association, called the decision a major setback.
“More businesses will close sooner as the legal price is just too far away from illegally obtained products,” Kiloh said. “Less investment in starting or continuing cannabis operations will occur, and demand for cannabis licenses will decline exponentially.”
According to state-commissioned research, most cannabis consumers in California still purchase from the illegal market, where prices are significantly lower due to the absence of taxes and regulations. The widening price gap is making it increasingly difficult for legal dispensaries to stay afloat.
Amy O’Gorman Jenkins, executive director of the California Cannabis Operators Association, echoed Kiloh’s concerns, calling on state leaders to intervene.
“Cannabis businesses already can’t afford to pay the 15% tax rate, let alone operate under the impending increase,” she said. “We’re urging the Legislature and Administration to act quickly and freeze the tax at 15%. If we want a regulated market to survive in California, the time to intervene is now.”
Some lawmakers agree. Assemblymember Matt Haney (D–San Francisco) has introduced a bill to block the tax increase. The legislation passed a key committee vote unanimously on April 24 and continues to move through the Legislature.
With thousands of cannabis businesses having already shut down and legal sales shrinking, many in the industry say the state is sending the wrong message at the worst possible time.
While the tax hike may fulfill a statutory obligation, critics argue it represents poor economic policy that undercuts California’s stated goal of building a sustainable, regulated cannabis market.
