California Cannabis Industry Faces Potential Crisis Amid Proposed Tax Increase

0.8 min readPublished On: February 10th, 2025By HCN News Team

LOS ANGELES- The legal cannabis industry in California is confronting significant financial challenges as a proposed increase in the state excise tax looms. Currently set at 15%, the tax is scheduled to rise to 19% on July 1, 2025, unless state lawmakers intervene.

Industry stakeholders express concern that this tax hike could exacerbate existing financial strains. The legal market is already contending with high operational costs and competition from unlicensed sellers. An increase in taxes may further disadvantage licensed businesses, potentially leading to closures and a contraction of the legal market.

a new trade organization, the California Cannabis Organized Association (CaCOA), has been established. One of its primary objectives is to prevent the impending tax increase. CaCOA advocates for regulatory reforms to create a more sustainable environment for legal operators.

The situation underscores the ongoing challenges within California’s regulated cannabis framework. Balancing tax revenue generation with the economic viability of licensed businesses remains a critical issue for policymakers.

About the Author: HCN News Team

The News Team at Highly Capitalized are some of the most experienced writers in cannabis and psychedelics business & finance. We cover capital markets, finance, branding, marketing and everything important in between. Most of all, we follow the money.