Proposed Cannabis, Hemp, and Psychedelic Legislation
California’s current legislative session is now in full swing, bringing insight into the potential market shifts on the table for California’s cannabis, hemp, and psychedelic industries.
February 21, 2025 was the deadline for lawmakers to introduce bills for the 2025 legislative cycle. No further legislation may now be proposed, however, changes are allowed for bills that were timely introduced.
Importantly, the content of bills may be amended throughout the legislative process, thus it is important to track each proposed bill’s progress through the legislature. Proposed bills are worked through the committees during the spring, and must be passed by each house by June, in order to be presented for the Governor’s signature or veto.
For the current 2025-2026 legislative session, lawmakers across the state have introduced several significant bills that stakeholders should be aware of. Read on for an overview of key legislation proposed, and sign up for the Manzuri Law newsletter to stay up to date on all important legislative and policy updates impacting the California cannabis, hemp, and psychedelic industries.
Proposed Cannabis Legislation
AB-564: Cannabis Excise Tax Repeal
Under existing law, an excise tax, at a rate of 15% of the gross receipts of any retail sale, is imposed on purchasers of cannabis or cannabis products. AB 195 (codified at Section 34011.2 of the Revenue and Taxation Code) requires the California Department of Tax and Fee Administration (CDTFA) to adjust this cannabis excise tax rate by a percentage (up to 19%) that would generate revenue equivalent to what would have otherwise been collected by the cannabis cultivation tax that was previously repealed in 2022, beginning in the 2025–26 fiscal year and every 2 years thereafter. This excise tax increase was intended to ensure sufficient funding for programs funded by cannabis taxes, following repeal of the cannabis cultivation tax.
AB 564, introduced by Assemblymember Haney, would repeal the requirement that the CDTFA adjust the cannabis excise tax rate, thus leaving the existing 15% excise tax rate in place. This proposed bill would bring much needed relief to California’s already over-taxed cannabis industry, which harms licensees and consumers alike.
AB 686: Prohibited Activities for Cannabis Appointees
Under existing law, the director of the Department of Cannabis Control (DCC) and any member of the Cannabis Control Appeals Panel is prohibited from engaging in certain activities, such as directly or indirectly receiving any commission or profit from a commercial cannabis license applicant.
AB 686, introduced by Assemblymember Berman, would expand this common sense prohibition and apply it to all individuals appointed by the Governor to specified positions in the DCC.
SB 479: Cannabis
SB 479, introduced by Senator Arreguín, states that this “bill would state the intent of the Legislature to enact legislation relating to cannabis.”
At this time, the bill lacks substantive detail, and essentially serves as placeholder legislation, for the time being. As the legislative session progresses, there will be opportunity for the content of this bill to take shape. Stay tuned for developments and insights into Senator Arreguín’s vision for the future of California cannabis reform.
AB 1332: Shipping Medicinal Cannabis Directly to Patients
Under existing law, localities may not prohibit the retail sale of cannabis products via delivery within their jurisdiction for medicinal cannabis to medicinal cannabis patients.
AB 1332, introduced by Assemblymember Ahrens, would authorize microbusinesses with an M-license authorized to engage in retail, distribution, and outdoor cultivation, to ship medicinal cannabis to medicinal cannabis patients in the state. Accordingly, the proposed bill would expand the existing law to prohibit localities from prohibiting retail sale by shipment within the described parameters.
AB 1496: Cannabis Task Force
Prior law, repealed on January 1, 2025, created a task force on state and local regulation of commercial cannabis activity.
AB 1496, introduced by Assemblymember Rubio, would reinstate this task force in order to promote communication and facilitate cooperation between state and local authorities engaged in cannabis regulation. The task force would include representatives from the Department of Cannabis Control, California Department of Tax and Fee Administration, Department of Fish and Wildlife, State Water Resources Control Board, Department of the California Highway Patrol, Labor and Workforce Development Agency, and Department of Justice. Local jurisdictions and tribal government entities may also opt in to participate in the task force.
SB 378: Cannabis & Hemp Online Marketplaces
Under existing law, social media platforms are required to publish a policy statement regarding use of social media for the illegal distribution of controlled substances, and procedures for responding to law enforcement inquiries.
SB 378, introduced by Senator Weiner, would expand this law to require online cannabis marketplaces to publish a statement in its terms and services indicating whether the marketplace verifies the license status of sellers advertising on its platforms, and to create an online reporting system for users to report unlicensed sellers and products. If the marketplace does not audit license status, it would be required to post a warning about the risks of using cannabis from unlicensed sources.
Importantly, the bill would impose strict liability on an online marketplace that facilitated the connection between a consumer and an unlicensed seller of cannabis or intoxicating hemp products for damages caused to the consumer by the product. The bill would also increase the amount of damages that a plaintiff may recover based on what the marketplace knew or should have known at the time it facilitated the connection, and whether the harm in question was suffered by a child.
Proposed Hemp Legislation
AB 1397: Hemp Beverages
AB 1397, introduced by Assemblymember Flora, would authorize hemp manufacturers to produce and sell “low-dose hemp” drinks with no more than 0.5 milligrams of total THC per container to individuals 21 years of age and older.
The bill would also impose an excise tax on low-dose hemp drinks at a rate of 10% of the gross receipts on the retail sale of the product. The excise taxes would be deposited into a “Low-Dose Hemp Drink Excise Tax Fund” which would fund regulatory activities related to low-dose hemp drinks.
AB 8: Hemp
AB 8, introduced by Assemblymember Aguiar-Curry, would require out-of-state hemp manufacturers who produce industrial hemp food or beverage products for sale in the State of California to register with the California Department of Public Health.
Moreover, under current law, hemp is excluded from the legal definition of cannabis under MAUCRSA. AB 8 would change the law to state that a licensee is not prohibited from manufacturing, distributing, or selling products that contain industrial hemp or cannabinoids, extracts, or derivatives from industrial hemp, so long as the product complies with all applicable laws and regulations.
Read more in our latest article here.
Proposed Psychedelic Legislation
SB 751: Psychedelic Research Pilot Program
Under existing law, it is a crime to possess, cultivate, or administer controlled substances, including psilocybin and psilocyn (i.e., “magic mushrooms”), as well as to rent or provide a building of room for the purpose of storing or distributing controlled substances.
SB 751, proposed by Senator Becker, would require the California Health and Human Services Agency (CHHS) to supervise a “Veterans and First Responder Research Pilot Program” until January 1, 2031.
The U.S. Food and Drug Administration (FDA) granted the Breakthrough Therapy Designation to psilocybin and psilocyn based on early clinical data showing the benefits of these compounds in treating mental health disorders. As stated in the bill’s findings, this legislation was introduced in response to the troubling prevalence of mental health challenges related to traumatic on-the-job experiences faced by law enforcement, firefighters, veterans, and first responders.
This program would permit research and development of psilocybin services for these target populations, in up to 5 counties. The bill requests that the UC oversee the pilot programs and be responsible for protocol design, institutional review board approvals, training of psilocybin facilitators, data collection, and reporting, and also requires each local pilot program to partner with local mental health and community-based providers to provide services and care. CHHS would be required to publish a report about the program to the California legislature by January 15, 2030.
While the scope of this bill is far more narrow than what psychedelic policy advocates would like to see, it is a positive step towards increasing access to psychedelic services in California, where psychedelic policy reform has been met with political opposition from Governor Gavin Newsom over the last several years.