AB 564 is a needed boost for California’s legal cannabis market

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OPINION – California was an early pioneer in creating a legalized cannabis market. However, the establishment and maintenance of a stable market for the industry is a journey we are still on. San Francisco-based Assemblymember Matt Haney recognized the need to keep that journey on track. His bill, AB 564, provides a critical lifeline to licensed operators by freezing the cannabis excise tax at 15%.

This relief from AB 564 aims to ease the financial burdens on legal growers, distributors, and retailers. These are not faceless corporations; they are locally owned businesses that employ hardworking Californians. With more breathing room, they can continue to serve their markets, comply with safety and environmental standards, and innovate responsibly. Every shuttered business means lost jobs and less local investment, and lower tax revenues to help California communities that depend on the cannabis industry.

Unfortunately, legal businesses are being undercut by a thriving illicit market. Despite California producing an amount of legal cannabis that is more than twice what it sells, illicit operators still account for an estimated two-thirds of total cannabis sales. These sellers operate outside the law, avoiding taxes, labor protections, health safety standards, and environmental regulations. That’s dangerous for consumers and devastating for legitimate businesses trying to operate ethically and compete fairly.

Reducing the tax burden on licensed operators is one of the most effective tools we have to help the legal market compete. When legal products are more affordable and accessible, consumers are more likely to purchase from licensed retailers. That shift in consumer behavior strengthens tax revenues, protects public health, and brings California closer to the legal and equitable system that voters envisioned. Even before the excise tax increase the illicit market was already cutting deeply into California’s cannabis tax revenue. California is missing out on millions in lost annual revenue from illicit, untaxed sales. By helping licensed businesses succeed, AB 564 can grow long-term state and local revenues even with a temporary rate reduction.

The future of a thriving legal cannabis market will rely on bold leadership in government and collaboration and cooperation among industry partners. The State Legislature clearly recognizes the need to nurture this market back to health through thoughtful policy, and that now is the time for that intervention. It is encouraging to see the legal cannabis community from seed to sale—growers, distributors, retailers, and workers—come together in support of AB 564. This bill strengthens the legal market, protects consumers, supports local economies, and helps California realize the promise of a safe, regulated, and thriving cannabis industry.

Brian Camire, General Counsel of Weedmaps, leads the company’s legal affairs, regulatory, and compliance groups.