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 – As of July 1, cannabis buyers in California are paying more at checkout. A new statewide excise tax of 19%—up from 15%—officially took effect this week, raising concerns among dispensary owners and industry advocates who warn the increase could threaten the state’s already fragile legal cannabis market.
The tax, applied before sales taxes and calculated based on gross receipts, now includes not just the price of cannabis products, but also local cannabis taxes, delivery fees, service charges, and the cost of required items like packaging or vape cartridges. For a $35 delivery, customers will now pay $8.84 in excise taxes—nearly two dollars more than under the previous rate—resulting in a total of $55.34 once all taxes are applied.
This 4% increase stems from a provision in Assembly Bill 195, passed in 2022. The bill ended the cultivation tax levied on growers and replaced it with a scheduled bump in retail excise tax, in hopes of simplifying the system and bolstering the licensed market. Lawmakers at the time argued that eliminating the cultivation tax would help legal operators compete against unlicensed sellers, while preserving state funding for youth substance abuse programs, environmental clean-up, and other public services through adjusted excise taxes.
But many in the cannabis industry say the increase has arrived at the worst possible moment.
Dispensary owners in Southern California, where local sales taxes already run high—up to 10.75% in cities like Azusa—say the state’s tax burden could drive more consumers back to the unregulated market. The state’s goal of stamping out illicit sellers may be undercut by its own policies, they argue, if legal cannabis becomes unaffordable or uncompetitive.
In West Hollywood, dispensaries also lost access this week to a local tax rebate program that helped offset previous costs. Businesses must now decide whether to absorb the new tax themselves or pass it on to consumers, many of whom are already struggling with high living costs.
The California Department of Tax and Fee Administration, which is required to adjust the cannabis excise tax rate every two years, says the new rate reflects what the cultivation tax would have raised had it not been repealed. But for legal cannabis operators, that calculation is cold comfort.
Industry leaders continue to warn that the financial pressure on licensed sellers—already operating in a difficult regulatory environment—may be unsustainable. While cannabis remains a promising source of revenue and community reinvestment, the risk now is that a steeper tax might cripple the very market California sought to protect.
