CA AB195

Discontinues the cultivation tax effective January 1, 2023, and replaces it with an expanded cannabis excise tax of 15% on gross receipts of retail sales, adjustable every two years up to a maximum of 19% to offset lost cultivation tax revenue.

Shifts cannabis excise tax collection responsibility from distributors to cannabis retailers beginning January 1, 2023, requiring retailers to collect and remit the tax quarterly to the California Department of Tax and Fee Administration.

Increases labor peace agreement requirements from 20+ employees to 10+ employees effective July 1, 2024, with enforcement mechanisms including license suspension, revocation, or discipline for non-compliance.

Establishes civil penalties up to $10,000 per day for property owners who knowingly rent space for unlicensed cannabis cultivation, and authorizes county counsel to bring enforcement actions for water rights violations related to unlicensed cannabis cultivation.

Appropriates $10,000 in fiscal year 2022–23 and $150,000,000 in fiscal year 2023–24 from the General Fund to maintain baseline funding levels for community reinvestment, youth education, environmental restoration, and public safety programs during the tax transition.