On September 22, 2025, California Governor Gavin Newsom signed two headline-grabbing measures into law, each sparking heated debate across the state. One, Assembly Bill 564, rolled back a controversial increase in the excise tax on legal cannabis, a move cheered by many in the industry and some consumers. The other, a $300 million initiative dubbed a "power grab" by critics, has drawn fire from political opponents and fueled accusations of government overreach at a time when the state faces a daunting budget deficit and mounting public frustration.
Let’s start with the cannabis tax. Just a few months ago, California’s excise tax on legal marijuana products had jumped from 15% to 19%, a change that sent shockwaves through dispensaries and customers alike. According to The Ventura County Star, dispensary owners in Ventura County reported that, with the combined effect of state and local taxes, the total cost of legal cannabis could soar as high as 40% above the sticker price. Even at the previous 15% excise rate, taxes could still push the total up to 35% or more. That’s a hefty premium for those trying to stay on the right side of the law.
Assembly Bill 564, authored by San Francisco Democrat Matt Haney, reverses the July 1 tax hike, bringing the excise tax back down to 15% and locking it in at that rate until at least 2028. The bill sailed through the Legislature and was signed by Governor Newsom on September 22. For many in the industry, it was a much-needed lifeline. As one Ventura County dispensary owner put it to The Star, "Between the taxes and other costs of running a legitimate business, legal weed often costs twice as much as the illicit kind." No wonder, then, that the black market continues to thrive: in 2024, seven years after recreational sales became legal, unlicensed sales still accounted for a staggering 62% of all cannabis sales in California, according to an industry report commissioned by the California Department of Cannabis Control.
Legal sales, meanwhile, have been on a downward slide. Data from the Department of Cannabis Control shows that legal cannabis sales in 2024 totaled $4.7 billion—a 16% drop from 2021. Interestingly, the volume of cannabis sold has remained relatively steady; it’s the prices that have fallen, dragging down overall revenues. The tax rollback aims to make legal products more competitive, but many say it’s just one piece of a much larger puzzle.
Retailers in Ventura County—where 35 licensed dispensaries operate across Ojai, Ventura, Oxnard, Port Hueneme, and Thousand Oaks—have felt the squeeze acutely. Only eight of those dispensaries are outside Oxnard or Port Hueneme, and the local market is fiercely competitive. Some cities also allow delivery services, adding another layer of complexity. With legal businesses struggling to compete with the untaxed black market, lawmakers faced mounting pressure to act. Legislators were already working to reverse the July 1 tax increase before it even took effect, and a bill to cancel the hike passed the Assembly unanimously in June. Governor Newsom had signaled his support early on, but the measure got bogged down in the Senate—until AB 564 finally made it to his desk and became law.
Still, not everyone is convinced the tax cut will solve the industry’s woes. As The Star noted, even with the lower excise tax, combined state and local taxes can still add up to more than a third of the retail price. And with legal cannabis still costing about twice as much as illicit products, the black market’s grip remains strong. The hope, at least among supporters, is that the tax rollback will help level the playing field and encourage more consumers to buy from licensed retailers, ensuring safer products and generating much-needed state revenue.
While the cannabis tax rollback was met with cautious optimism, Governor Newsom’s other major move on September 22 has been far more contentious. According to a statement from National Republican Congressional Committee (NRCC) spokesman Christian Martinez, Democratic Congressman Josh Harder is backing Newsom’s $300 million "power grab"—a plan Martinez says strips Californians of their constitutional rights and pours taxpayer money into a partisan effort to "protect their own grip on power." Martinez didn’t mince words, declaring, "Gavin Newsom and Democrat Josh Harder are taking away Californians’ constitutional rights to protect their own grip on power. They have become so corrupt that they’re more worried about holding onto their seats than fixing California’s schools, lowering costs, or addressing the real problems families face."
The criticism comes at a time of deep financial uncertainty for the state. California is currently grappling with a massive budget deficit, while schools struggle and families face rising costs for everything from groceries to housing. According to recent polls cited by the NRCC, fewer than half of Californians support the redistricting initiative at the heart of the "power grab" accusations. Yet, Democrats like Harder appear determined to push the measure through, fueling charges that they’re prioritizing political advantage over the needs and wishes of their constituents.
Supporters of Governor Newsom’s plan argue that the $300 million initiative is necessary to modernize California’s redistricting process and safeguard democratic participation. They contend that the current system is outdated and vulnerable to manipulation, and that investing in reforms now will pay dividends in fairer, more representative elections down the line. But critics remain unconvinced, seeing the move as a blatant attempt to consolidate power and sidestep checks and balances.
The debate has spilled over into the broader political landscape, with both sides accusing the other of ignoring the real issues facing Californians. While Democrats tout their efforts to address systemic problems and strengthen democratic institutions, Republicans point to the state’s budget woes, faltering schools, and high cost of living as evidence that the current leadership is out of touch. The NRCC’s Martinez summed up the opposition’s view succinctly: "They care more about clinging to power than listening to the people they represent."
For many Californians, these twin developments—one lowering taxes on a booming but beleaguered industry, the other sparking fierce debate over the future of the state’s democracy—capture the complexity and contradictions of life in the Golden State. On the one hand, lawmakers are responding to public pressure to make legal cannabis more affordable and competitive, hoping to undercut the black market and boost state revenues. On the other, they’re pushing through a major political initiative that, to some, smacks of self-interest and government overreach.
As the dust settles on Governor Newsom’s latest signatures, Californians are left to weigh the potential benefits and pitfalls. Will lower cannabis taxes bring more buyers into the legal market and help struggling businesses survive? Can a $300 million investment in redistricting really deliver a fairer, more accountable system—or is it, as critics claim, just another example of politicians looking out for themselves? The answers, as always, will depend on the choices voters make and the priorities they demand from their leaders.
For now, the debate rages on, with both sides digging in and ordinary Californians watching closely as their state navigates another pivotal moment in its ever-evolving political and economic story.