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📈🛠️ Thriving in a 19% Excise Tax World: Survival Strategies for California Cannabis Retailers

🚨 The Excise Tax is Going Up. Are You Ready?

Starting July 1, 2025, California’s cannabis excise tax will jump from 15% to 19%. For many retailers, this hits hard; margins are already tight, the illicit market is still thriving, and consumers are highly price-sensitive.

👉 In case you missed it, we first covered the announcement here:
It’s Official: California Cannabis Excise Tax Set to Rise to 19% Starting July 1, 2025

But here’s the truth: you don’t have to just survive this change—you can adapt, compete, and thrive.

Let’s break down what’s coming, what it means, and how to get ahead of it.

💸 What Does the 19% Tax Mean for You?

For every $100 in product sold, $19 will go directly to excise tax.
And that doesn’t include sales tax, local tax, or compliance costs.

👉 The pressure to maintain pricing while protecting your bottom line is real, and it's time to plan proactively.

✅ Survival Strategies for Retailers

1️⃣ Audit Your Margins & Pricing Structure

Use this moment to re-evaluate your entire pricing strategy.

• Are you maximizing margins on high-demand SKUs?
  
  

• Can you bundle products to create value without hurting margins?
  
  

• Consider small price shifts across categories instead of a big jump in one.
  
  

2️⃣ Strengthen Customer Loyalty

When taxes go up, loyalty becomes gold.

• Double down on loyalty programs
  
  

• Offer exclusive deals to repeat customers
  
  

• Keep users engaged with text/email updates, rewards, and reordering reminders
  
  

3️⃣ Get Operationally Lean

Efficiency = Profit.

• Automate wherever possible—especially orders & communication
  
  

• Review staffing models for peak/off-peak hours
  
  

• Cut non-essentials without compromising customer experience
  
  

4️⃣ Educate Your Customers

Sticker shock is real. Transparency builds trust.

• Use signage in-store and online to explain the price jump
  
  

• Advocate and inform on social media—not just sell
  
  

5️⃣ Offer More Value Without Deep Discounts

Instead of slashing prices, get creative:

• Free pre-roll with purchase?
  
  

• First-time customer bundles?
  
  

• “Happy hour” deals for online orders?
  
  

🧠 The Smartest Retailers Will Start Now

The tax doesn’t hit until July 1, but the time to move is now.
The earlier you tighten up, innovate, and communicate, the stronger your position.

💡 Tip:

Use a platform that helps you track margins, automate promotions, and communicate in real-time.
If your system doesn’t make that easy, it might be time for an upgrade.

🔚 In Conclusion:

Yes, the 19% excise tax is a challenge, But it’s also a chance.

The next era of California cannabis will reward the lean, creative, and connected retailers.
Be one of them!

As you have read in this article, it is not as straightforward as other industries. Operating a cannabis business is extremely difficult, and not having the know-how can really affect your bottom line. Vende Platform is made to help its clients run the business they have always wanted. Providing you with all the necessary tools for your business to succeed is our goal. Schedule a demo with us today and see how running your business on the Vende can help.