California Finally Cuts Cannabis Taxes — Whitney Beatty Was Right All Along
When I spoke with Whitney Beatty, owner of Josephine & Billie’s, a legal dispensary in Los Angeles, earlier this month about the woes she and many others are dealing with when it comes to staying in business, she didn’t mince words.
“Small businesses are drowning,” she told me. “Between the excise tax, the local tax, the compliance costs—there’s barely room to breathe. We were supposed to be building a legal industry, but the way taxes were structured, it felt like we were building a wall to keep us out.”
At the time, it was just another reminder of how tough the business of cannabis has been for operators trying to do things the right way. Beatty, along with BLACC (Black Legalization Advocacy & Cannabis Collective), had been vocal about how state policy often undercut the very businesses legalization was supposed to uplift.
This week, Governor Gavin Newsom finally made a move. He signed AB 564, a bill that rolls back a planned 25% increase and sets the excise tax at 15% until 2028. That could be a sign of relief for some smaller retail shop owners.
Beatty told me in our interview: “We had to speak up, because silence was killing small operators. BLACC had to go to the state and say, ‘Listen, if you want a legal industry that works, you can’t keep taxing us into the ground.’”
AB 564 seems to be a response to those voices. In a press release, The Governor’s office framed the legislation as a way to give the legal industry “long-term growth” while making sure the illicit market doesn’t keep eating away at regulated operators. The bill also expands grant money for local enforcement, a nod to the fact that legal businesses can’t compete fairly if unlicensed shops and growers keep flooding the market.
It’s worth remembering what Beatty stressed: “This isn’t about asking for a handout. It’s about asking for a chance. Equity brands, small shops—we can’t play ball if the rules are designed to bankrupt us.”
Tax relief alone won’t fix every problem, but it’s hard not to feel like this is a turning point. The 15% excise tax gives businesses some predictability. Enforcement funding, if applied well, could make the marketplace fairer. And the fact that Sacramento listened shows how far advocacy has come.
“We’re not going anywhere. We’ve invested too much to walk away. But the state has to decide if it really wants us here.”
With AB 564 signed into law, California just gave its answer.
