Marijuana plants are for sale in 2018 at the Magnolia cannabis dispensary during a Weed and Wine Tour in Oakland. Despite legalization, the illegal market still controls most weed sales in California.

California voters legalized adult-use cannabis in 2016 with the goals of bringing the industry out of the shadows, generating much-needed tax revenue and a desire to begin repairing the damage that decades of prohibition had inflicted on communities of color.

Nearly a decade later, the illegal market still controls an estimated 60% to 80% of cannabis sales in California. Licensed and lawful retailers are failing because they can’t compete with unlicensed growers who continue to operate outside the system. Illegal storefronts operate openly on our cities’ boulevards while the legal cannabis industry — the one Sacramento created, licensed and taxed — is dying. California’s legal weed market contracted for the third consecutive year in 2025, with retail sales dropping from $4.2 billion in 2024 to $3.9 billion in 2025. This was driven by competition from an enormous illicit market, severe pricing compression and a state excise tax hike.

This is not a federal problem. It is a Sacramento problem.

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California’s cannabis excise tax has been raised, cut and raised and cut again. The rate started at 15% under Proposition 64, before jumping to 19% in 2025, a move that crashed legal sales almost immediately. Gov. Gavin Newsom then signed legislation lowering the rate back to 15%, but that will only extend through June 30, 2028, when an automatic adjustment mechanism will kick in again, raising the tax back to 19%.

This is no way to govern. The........

© San Francisco Chronicle