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		<ns0:Id>20250AB__056493CHP</ns0:Id>
		<ns0:VersionNum>93</ns0:VersionNum>
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				<ns0:ActionText>INTRODUCED</ns0:ActionText>
				<ns0:ActionDate>2025-02-12</ns0:ActionDate>
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				<ns0:ActionText>AMENDED_ASSEMBLY</ns0:ActionText>
				<ns0:ActionDate>2025-05-07</ns0:ActionDate>
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				<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
				<ns0:ActionDate>2025-07-10</ns0:ActionDate>
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				<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
				<ns0:ActionDate>2025-09-02</ns0:ActionDate>
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				<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
				<ns0:ActionDate>2025-09-05</ns0:ActionDate>
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				<ns0:ActionText>PASSED_ASSEMBLY</ns0:ActionText>
				<ns0:ActionDate>2025-09-11</ns0:ActionDate>
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				<ns0:ActionText>PASSED_SENATE</ns0:ActionText>
				<ns0:ActionDate>2025-09-10</ns0:ActionDate>
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				<ns0:ActionText>ENROLLED</ns0:ActionText>
				<ns0:ActionDate>2025-09-15</ns0:ActionDate>
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			<ns0:Action>
				<ns0:ActionText>CHAPTERED</ns0:ActionText>
				<ns0:ActionDate>2025-09-22</ns0:ActionDate>
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			<ns0:Action>
				<ns0:ActionText>APPROVED</ns0:ActionText>
				<ns0:ActionDate>2025-09-22</ns0:ActionDate>
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			<ns0:Action>
				<ns0:ActionText>FILED</ns0:ActionText>
				<ns0:ActionDate>2025-09-22</ns0:ActionDate>
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		<ns0:LegislativeInfo>
			<ns0:SessionYear>2025</ns0:SessionYear>
			<ns0:SessionNum>0</ns0:SessionNum>
			<ns0:MeasureType>AB</ns0:MeasureType>
			<ns0:MeasureNum>564</ns0:MeasureNum>
			<ns0:MeasureState>CHP</ns0:MeasureState>
			<ns0:ChapterYear>2025</ns0:ChapterYear>
			<ns0:ChapterType>CHP</ns0:ChapterType>
			<ns0:ChapterSessionNum>0</ns0:ChapterSessionNum>
			<ns0:ChapterNum>127</ns0:ChapterNum>
		</ns0:LegislativeInfo>
		<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Haney</ns0:AuthorText>
		<ns0:AuthorText authorType="PRINCIPAL_COAUTHOR_ORIGINATING">(Principal coauthor: Assembly Member Quirk-Silva)</ns0:AuthorText>
		<ns0:AuthorText authorType="COAUTHOR_ORIGINATING">(Coauthor: Assembly Member Ransom)</ns0:AuthorText>
		<ns0:Authors>
			<ns0:Legislator>
				<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
				<ns0:House>ASSEMBLY</ns0:House>
				<ns0:Name>Haney</ns0:Name>
			</ns0:Legislator>
			<ns0:Legislator>
				<ns0:Contribution>PRINCIPAL_COAUTHOR</ns0:Contribution>
				<ns0:House>ASSEMBLY</ns0:House>
				<ns0:Name>Quirk-Silva</ns0:Name>
			</ns0:Legislator>
			<ns0:Legislator>
				<ns0:Contribution>COAUTHOR</ns0:Contribution>
				<ns0:House>ASSEMBLY</ns0:House>
				<ns0:Name>Ransom</ns0:Name>
			</ns0:Legislator>
		</ns0:Authors>
		<ns0:Title>An act to amend Section 34011.2 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. </ns0:Title>
		<ns0:RelatingClause>taxation, to take effect immediately, tax levy</ns0:RelatingClause>
		<ns0:GeneralSubject>
			<ns0:Subject>Cannabis: excise tax: rate increase suspension: report.</ns0:Subject>
		</ns0:GeneralSubject>
		<ns0:DigestText>
			<html:p>Existing law, the Control, Regulate and Tax Adult Use of Marijuana Act (AUMA), an initiative measure, authorizes a person who obtains a state license under AUMA to engage in commercial adult-use cannabis activity pursuant to that license and applicable local ordinances. The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities and establishes the Department of Cannabis Control (DCC) within the Business, Consumer Services, and Housing Agency to administer the act.</html:p>
			<html:p>Existing law, the Cannabis Tax Law, imposes an excise tax upon purchasers of cannabis or cannabis products sold in this state at the rate of 15% of the gross receipts of any retail sale by a cannabis retailer, and, as enacted by AUMA, imposed a
			 cultivation tax on all harvested cannabis that entered the commercial market, as specified. Chapter 56 of the Statutes of 2022 (AB 195) amended AUMA to, among other things, discontinue the imposition of the cultivation tax on July 1, 2022. AB 195, beginning in the 2025–26 fiscal year and every 2 years thereafter, requires the California Department of Tax and Fee Administration (CDTFA) to adjust the cannabis excise tax rate by a percentage that will generate an amount of revenue that would have been collected pursuant to the cultivation tax imposed prior to its discontinuation, as specified, not to exceed 19% of the gross receipts of retail sale. Pursuant to that law, the department increased the cannabis excise tax rate to 19% for the 2025–26 fiscal year.</html:p>
			<html:p>This bill would revise the above-described provisions governing the cannabis excise tax rate. Specifically, the bill, for the period from July 1, 2025, to September 30, 2025, inclusive, would retain the existing
			 cannabis excise tax rate of 19%. For the period from October 1, 2025, to June 30, 2028, inclusive, the bill would decrease the excise tax rate to 15%. Beginning in the 2028–29 fiscal year and every 2 years thereafter, the bill would require the department to adjust the cannabis excise tax rate by a percentage that will generate an amount of revenue that would have been collected pursuant to the cultivation tax imposed prior to its discontinuation, as specified, not to exceed 19%. The bill would also require the DCC, in consultation with the CDTFA and the Legislative Analyst’s Office, on or before October 1, 2027, to submit a report to the Legislature that analyzes, among other things, the current and future effect of the Cannabis Tax Law on the regulated cannabis market and recommends options for changes to the Cannabis Tax Law to accomplish the intent of AUMA.</html:p>
			<html:p>Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific
			 goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.</html:p>
			<html:p>This bill also would include additional information required for any bill authorizing a new tax expenditure.</html:p>
			<html:p>This bill would take effect immediately as a tax levy.</html:p>
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		<ns0:DigestKey>
			<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
			<ns0:Appropriation>NO</ns0:Appropriation>
			<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
			<ns0:LocalProgram>NO</ns0:LocalProgram>
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			<ns0:ImmediateEffect>YES</ns0:ImmediateEffect>
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				<ns0:Urgency>NO</ns0:Urgency>
				<ns0:TaxLevy>YES</ns0:TaxLevy>
				<ns0:Election>NO</ns0:Election>
				<ns0:UsualCurrentExpenses>NO</ns0:UsualCurrentExpenses>
				<ns0:BudgetBill>NO</ns0:BudgetBill>
				<ns0:Prop25TrailerBill>NO</ns0:Prop25TrailerBill>
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	<ns0:Bill id="bill">
		<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
		<ns0:BillSection id="id_F45EAFD0-11FA-4525-B5E3-D5A265D6B5AF">
			<ns0:Num>SECTION 1.</ns0:Num>
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				Section 34011.2 of the 
				<ns0:DocName>Revenue and Taxation Code</ns0:DocName>
				 is amended to read:
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				<ns0:LawSection id="id_A7D60A20-A525-48FF-A7BB-E3CEA673B310">
					<ns0:Num>34011.2.</ns0:Num>
					<ns0:LawSectionVersion id="id_06D80AD0-A810-467A-B340-8AEC4B26D64F">
						<ns0:Content>
							<html:p>
								(a)
								<html:span class="EnSpace"/>
								(1)
								<html:span class="EnSpace"/>
								Effective on and after January 1, 2023, a cannabis excise tax shall be imposed upon purchasers of cannabis or cannabis products sold in this state at 15 percent of the gross receipts of any retail sale by a cannabis retailer.
							</html:p>
							<html:p>
								(2)
								<html:span class="EnSpace"/>
								Notwithstanding paragraph (1), on and after July 1, 2025, and before October 1, 2025, the cannabis excise tax rate imposed in paragraph (1) shall be 19 percent of the gross receipts of any retail sale by a cannabis retailer as determined by the department, in consultation with the Department of Finance, pursuant to this section, as added by Section 22 of Chapter 56 of the Statutes of 2022.
							</html:p>
							<html:p>
								(3)
								<html:span class="EnSpace"/>
								For the 2028–29 fiscal year and every two years thereafter, the department, in consultation with the Department of Finance, shall, on or before May 1 of the fiscal year immediately preceding the applicable fiscal year, adjust the cannabis excise tax rate upon purchasers of cannabis or cannabis products imposed in paragraph (1) by the additional percentage of the gross receipts of any retail sale by a cannabis retailer that the department estimates will generate an amount of revenue equivalent to the amount that would have been collected in the previous fiscal year pursuant to the weight-based cultivation tax imposed under Section 34012 as it read on June 29, 2022. In no case shall the cannabis excise tax exceed 19 percent of the gross receipts of retail sale. The department shall round the rate calculated under this subdivision to the nearest one-quarter of 1 percent. The adjusted rate
						shall become operative the following July 1.
							</html:p>
							<html:p>
								(4)
								<html:span class="EnSpace"/>
								On or before May 1, 2028, and each May 1 every two years thereafter, the department, in consultation with the Department of Finance, shall estimate the amount of revenue that would have been collected in the previous fiscal year pursuant to the weight-based cultivation tax imposed under Section 34012 as it read on June 29, 2022. The department shall estimate this amount by projecting the revenue from weight-based cultivation taxes that would have been collected in the previous calendar year based on information available to the department, including, but not limited to, information in the track and trace system required pursuant to Chapter 6.5 (commencing with Section 26067) of Division 10 of the Business and Professions Code,
						or any implementing regulations, as a percentage of gross receipts from the retail sale of cannabis and cannabis products by cannabis retailers in the previous calendar year. 
							</html:p>
							<html:p>
								(b)
								<html:span class="EnSpace"/>
								A purchaser’s liability for the cannabis excise tax is not extinguished until the cannabis excise tax has been paid to this state, except that an invoice, receipt, or other document from a cannabis retailer given to the purchaser pursuant to this section is sufficient to relieve the purchaser from further liability for the tax to which the invoice, receipt, or other document refers.
							</html:p>
							<html:p>
								(c)
								<html:span class="EnSpace"/>
								A cannabis retailer shall be responsible for collecting the cannabis excise tax from the purchaser and remitting that tax to the department in accordance with this
						division.
							</html:p>
							<html:p>
								(d)
								<html:span class="EnSpace"/>
								The cannabis retailer shall provide each purchaser with an invoice, receipt, or other document that separately states the cannabis excise tax.
							</html:p>
							<html:p>
								(e)
								<html:span class="EnSpace"/>
								The cannabis excise tax imposed by this section shall be in addition to the sales and use tax imposed by the state and local governments.
							</html:p>
							<html:p>
								(f)
								<html:span class="EnSpace"/>
								Gross receipts from the sale of cannabis or cannabis products for purposes of assessing the sales and use taxes under Part 1 (commencing with Section 6001) shall include the tax levied pursuant to this section.
							</html:p>
							<html:p>
								(g)
								<html:span class="EnSpace"/>
								Cannabis or cannabis products shall not be sold to a purchaser unless the cannabis excise tax imposed by this section has been paid by the
						purchaser at the time of sale.
							</html:p>
							<html:p>
								(h)
								<html:span class="EnSpace"/>
								This section shall not be construed to impose a cannabis excise tax upon medicinal cannabis, or medicinal cannabis product, donated for no consideration to a medicinal cannabis patient pursuant to Section 26071 of the Business and Professions Code.
							</html:p>
							<html:p>
								(i)
								<html:span class="EnSpace"/>
								(1)
								<html:span class="EnSpace"/>
								This section shall not be construed to impose a cannabis excise tax upon cannabis or cannabis products designated as a trade sample pursuant to Section 26153.1 of the Business and Professions Code.
							</html:p>
							<html:p>
								(2)
								<html:span class="EnSpace"/>
								A person licensed under Division 10 (commencing with Section 26000) of the Business and Professions Code that sells cannabis or cannabis products designated as a trade sample pursuant to Section 26153.1 of the
						Business and Professions Code shall be liable for the cannabis excise tax imposed by this section as if the person were a cannabis retailer at the time of sale.
							</html:p>
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		<ns0:BillSection id="id_D995679E-45AE-4FF7-8B37-E1C466DE0ACC">
			<ns0:Num>SEC. 2.</ns0:Num>
			<ns0:Content>
				<html:p>
					(a)
					<html:span class="EnSpace"/>
					For purposes of complying with Section 41 of the Revenue and Taxation Code, as it pertains to the reduction of the cannabis excise tax rate allowed pursuant to Section 34011.2 of the Revenue and Taxation Code as amended by this act, the Legislature finds and declares both of the following:
				</html:p>
				<html:p>
					(1)
					<html:span class="EnSpace"/>
					The specific goal of the cannabis excise tax rate reduction is to provide immediate tax relief to the cannabis industry.
				</html:p>
				<html:p>
					(2)
					<html:span class="EnSpace"/>
					The efficacy of this goal may be measured by the Legislature by
				the amount of gain or loss in cannabis excise tax revenues resulting from the cannabis excise tax rate reduction allowed by this act.
				</html:p>
				<html:p>
					(b)
					<html:span class="EnSpace"/>
					On or before June 1, 2027, and annually thereafter, the California Department of Tax and Fee Administration shall submit a report to the Legislature, in compliance with Section 9795 of the Government Code, detailing the estimated amount of gain or loss in cannabis excise tax revenues resulting from the cannabis excise tax rate reduction allowed by this act.
				</html:p>
				<html:p>
					(c)
					<html:span class="EnSpace"/>
					This section shall remain in effect only until January 1, 2029, and as of that date is repealed.
				</html:p>
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		</ns0:BillSection>
		<ns0:BillSection id="id_AC547645-06D0-4B05-8B81-BD567B564798">
			<ns0:Num>SEC. 3.</ns0:Num>
			<ns0:Content>
				<html:p>
					(a)
					<html:span class="EnSpace"/>
					On or before October 1, 2027, the Department of Cannabis Control, in consultation with the California Department of Tax and Fee Administration and the Legislative Analyst’s Office, shall submit a report to the Legislature, in compliance with Section 9795 of the Government Code, that does all of the following:
				</html:p>
				<html:p>
					(1)
					<html:span class="EnSpace"/>
					Analyzes the current and future effect of the Cannabis Tax Law (Part 14.5 (commencing with Section 34010) of Division 2 of the Revenue and Taxation Code) on the regulated cannabis market and its competitive position against the illicit cannabis market.
				</html:p>
				<html:p>
					(2)
					<html:span class="EnSpace"/>
					Assesses the capacity for the Cannabis Tax Law (Part 14.5 (commencing with Section 34010) of Division 2 of the Revenue and Taxation Code) to generate revenue to restore the environment, fund youth treatment and prevention, and support community investment and law enforcement, consistent with Section 3 of the Control, Regulate and Tax Adult Use of Marijuana Act.
				</html:p>
				<html:p>
					(3)
					<html:span class="EnSpace"/>
					Recommends options for changes to the Cannabis Tax Law (Part 14.5 (commencing with Section 34010) of Division 2 of the Revenue and Taxation Code) to accomplish the intent of the Control, Regulate and Tax Adult Use of Marijuana Act, including revenue effects, administrative feasibility, consistency with the purposes of the act, and impact on the regulated and illicit cannabis markets.
				</html:p>
				<html:p>
					(b)
					<html:span class="EnSpace"/>
					The
				California Department of Tax and Fee Administration shall share information and data with the department to the extent necessary to complete the report required by subdivision (a). 
				</html:p>
				<html:p>
					(c)
					<html:span class="EnSpace"/>
					This section shall remain in effect only until January 1, 2029, and as of that date is repealed.
				</html:p>
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		</ns0:BillSection>
		<ns0:BillSection id="id_9B3055C8-59B3-4ED2-A5A1-0E0408CDFF49">
			<ns0:Num>SEC. 4.</ns0:Num>
			<ns0:Content>
				<html:p>This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.</html:p>
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