Legal cannabis sales in California, the country’s biggest market, dipped to a five-year low after a since-repealed excise tax hike went into effect July 1, recent state data shows.
The predictable – and predicted – effect of increased taxes in an already lagging mature market spells potential trouble for other states where officials are raising taxes such as Michigan, where lawmakers recently approved a new 24% wholesale tax.
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California cannabis retailers reported just shy of $940 million in cannabis sales in the third quarter of 2025, according to California Department of Tax and Fee Administration data.
That’s down from $993 billion in the second quarter of 2025 and represents the lowest quarterly haul since early 2020, before sales spiked during the COVID-19 pandemic.
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