California Cannabis Faces Critical Tax Decision: Insights from Goldenhour Podcast

(05.15.25 UPDATE: This podcast was recorded on May 13, 2025, and you can view CaCOA’s response to Governor Newsom’s proposed budget here. Click here to stop the tax hike!)

In a recent episode of the Goldenhour podcast, David Spradlin, CEO of Goldenhour Collective, and Amy O'Gorman Jenkins, executive director of the California Cannabis Operators Association (CaCOA), discussed the critical tax challenges facing California's cannabis industry.

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MAKE YOUR VOICE HEARD! It only takes 30 seconds to let your state legislators know how this tax increase will negatively impact consumers and patients: cacoa.org/freeze-the-tax.

The cannabis industry currently faces a scheduled tax increase that would raise the state excise tax from 15% to 19% on July 1, 2025. This 25% tax hike comes when the industry struggles with an oversized illicit market and declining sales.

As Jenkins explained, "We're all laser-focused on ensuring that we can avert the tax hike on the excise tax scheduled to go into effect July 1st. The industry has locked arms and is completely united in our advocacy efforts to prevent that from happening."

At a time when Californians are struggling with rising costs across the board, this increase would place an additional burden on cannabis patients and consumers. 

"This is not about corporate profits," Jenkins said. "This is money paid by consumers shopping in legal stores."

As Spradlin noted, "Consumers can only take so much. So you start picking up those prices by 5-10% on a product already viewed as a little bit higher priced than the competition. And at a certain point, you do hit a breaking point."

Beyond financial impact, the tax increase threatens public health and safety by potentially driving more consumers to unregulated products. Jenkins highlighted how price-sensitive cannabis consumers are, with research showing "even a 1% differential in price can drive consumers away from the legal market."

The illicit cannabis market, which already comprises more than 60% of sales in California, offers products that aren't tested for contaminants or potency, posing significant health risks to consumers.

Regarding timing, Jenkins explained that Assembly Bill 564 (Haney) may not complete the typical nine-month legislative process before the July 1st deadline. Instead, they hope to incorporate the tax freeze into the state budget, which must pass by June 15th.

"We've seen the bill, the bill's been debated... What we're hoping will happen now is that this bill will essentially merge into the budget process. And if it transitions into the budget process, we can wrap this up and avert any sort of tax hike by July 1st," Jenkins said.

Since Proposition 64 took effect, the cannabis industry has contributed over $6.5 billion in taxes. Yet the legal market continues to struggle against illicit competition.

"Cannabis license holders, they're union employers, they're small business owners. They're huge contributors to their communities," Jenkins emphasized. "But at the end of the day, we cannot keep carrying this weight alone. We cannot be burdened with a 25% tax increase."

Spradlin concluded that while everyone in the supply chain is in a "fragile state" after six to seven years of operation under current conditions, a thriving cannabis industry would ultimately benefit all stakeholders.

Connect with CaCOA online at cacoa.org and on social media: @cannaoperators on LinkedIn, X, Bluesky, Facebook, and YouTube.

DISCLAIMER: The Goldenhour Podcast provides information about cannabis and related topics for general informational and entertainment purposes only. The content is intended for adults 21+ and should not be considered medical, legal, or professional advice, as cannabis remains federally illegal in the United States and laws vary by jurisdiction. The views expressed by hosts and guests are their own, and any discussions about health effects, business opportunities, or consumption should not be taken as recommendations. By listening to this podcast, you acknowledge that you are solely responsible for complying with applicable laws in your jurisdiction and that any actions taken based on the information presented are entirely at your own risk.