State Assemblyman Matt Haney, D-San Francisco, plans next week to introduce AB 564, or the Cannabis Tax Relief bill, to stop a tax hike — from 15% to 19% — set to go into effect on July 1.

Haney also authored AB 1775, which this year allowed dispensaries to open Amsterdam-style cannabis cafes with food and non-alcoholic drinks. While that bill and the one Haney is introducing next week could help boost local dispensaries’ revenues, some shops are nevertheless worried a tax hike will drive more cannabis consumers to the black market.

“The illicit or unregulated market is the biggest competition,” said Zoe Schreiber, director of compliance and public affairs for The Highlands Dispensary, which opened in unincorporated Livermore in 2022. “As a full retail community, our biggest competitors are not each other, but rather a market that’s unregulated.”

Schreiber said customers often complain of the high taxes on cannabis products at her dispensary, which can make up about 30% to 40% of the overall price out the door, she said. She said that in addition to the expected 4% excise tax increase, licensing and regulatory fees continue to drive the prices of legal cannabis products up, while pushing consumers away from the regulated market.

“‘I know a guy,’ or ‘my guy can get it to me for less.’ Those comments are ones that we do hear,” Schreiber said. “By continuing to do things to make regulated cannabis more expensive, or even where it’s at now, we lose over half the market. We lose the ability to create that safe space, which is what consumers voted for in 2016 with Prop. 64.”

Haney said he is putting the Cannabis Tax Relief forward to protect legal cannabis businesses from closing as the illegal market continues to grow at a faster rate.

“California’s cannabis industry is struggling. And a huge tax increase right now could be the nail in the coffin,” Haney said in an interview Wednesday. “This is absolutely the wrong time for a 25% tax increase on a fledgling legal cannabis industry that is trying to follow all of the rules and pay their taxes and is losing out everyday to those who are not.”

He also compared the legal weed industry’s tax bracket to that of wine or beer, saying a glass of alcohol includes about one or two cents in taxes, whereas taxes on a joint can cost over a dollar.

Haney added that California’s legal cannabis industry appears to be falling behind the cannabis-industry growth of other states such as Michigan, Colorado and Washington, which have lower taxes and friendlier regulations.

“I think that when cannabis was legalized in California, they did not expect that the illegal market would continue to thrive and grow and compete at the scale that it has,” Haney said. “They are operating outside of our laws entirely.

“Until California takes action to put a stop to that, we have to make sure that our businesses that are following the law are not so overly taxed and burdened that they cannot operate at all. This is common sense.”

Mel Gibson, the well-known actor and director who lost his Malibu home in the Palisades fire, went to Altadena on Wednesday, Feb. 26, to show his support for an effort to recall Gov. Gavin Newsom, who was also in the Los Angeles area.

“Gov. Newsom and (L.A. Mayor) Karen Bass let us all down,” he said, expressing his sympathy for other victims of the fire, some of whom were in attendance.

“California was ill-prepared and had scant resources to deal with the inevitable fires,” he said. “They knew that. So are we supposed to believe our elected officials didn’t know that? Of course they knew that.”

Gibson said California has the highest levels of taxes in the country, a state where high wage earners have long paid the country’s highest state income tax rate of 13.3%.

“Now, for that kind of money, we deserve much more and much better,” he said. “And there is absolutely no adequate excuse the governor or mayor can make for this gross mismanagement and failure to preemptively deal with what they knew was coming.”

About 100 people, many wearing Trump merchandise, stood in the hot sun in the Altadena foothills at the fire-burned property of Marylee Blueford, a 98-year-old woman who had lived there since 1970.

Randy Economy, the chair of Saving California, who served as senior advisor during a 2020 effort to recall Newsom in response to the pandemic, said, “We’ve been working on this recall effort for six months. It’s not just about the fires, it’s about the political firestorm that has erupted over this whole situation.”

Economy, a radio host and media professional, said this effort is different from the Recall Gavin 2020. “I was the senior advisor of that recall. It’s totally different (now) than it was then.”

He said Newsom had an approval rating of 53% during that recall effort, and claimed that Newsom’s approval rating had fallen to the 20’s. A poll last June by Public Policy Institute of California found 44% approved of Newsom’s performance as governor.

Economy called the wildfires “emblematic of the whole situation.”

Nathan Click, a spokesman for Newsom, criticized the group and its efforts.

Nathan Click, a spokesperson for Newsom, said in a statement that the governor “is focused on leading the state and the recovery from the L.A. fires – not politics.”

Many of the same people were involved in other unsuccessful recall attempts against Newsom in the past, “each of which have failed spectacularly,” Click said.

Economy and Gibson, meanwhile, implied that Newsom could not be trusted with the $40 billion he’s requested in federal aid.

The failed recall against Newsom was only the second attempt to recall a sitting governor in California history to reach the ballot after voters recalled Democrat Gray Davis in 2003. Voters then replaced him with Republican Arnold Schwarzenegger.

Recall proponents must conduct some preliminary steps, such as filing a notice of intention, then prepare a petition. For statewide officeholders, the petition must be signed by registered voters equal in number to 12% of the last election for governor. That means petitioners are seeking 1.5 million signatures within a 160-day period of the secretary of state’s certification.

On Wednesday, fans in the crowd called out to Gibson that he should run for governor.

“We love you, Mel,” they called.

He claimed that Newsom had made it too costly to film movies in Los Angeles, and questioned the governor’s handling of money.

“Why would we trust him with that kind of funding?” Gibson said. “Along with that federal money should come a federal investigation.”

Following comments by Gibson and Economy, Bishop Juan Carlos Mendez, founder of Churches for Action — a group supporting the recall — spoke in support of their cause, but was apparently overcome by the heat. The press conference ended and an ambulance was called to help Mendez.

Jarret Liotta is a Los Angeles-based freelance writer and photographer.