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Legal weed clashes with child care. Why a cannabis tax cut could spell trouble for children

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Legal weed clashes with child care. Why a cannabis tax cut could spell trouble for children

A fight over taxes consumers pay for cannabis products has prompted a standoff between unusual adversaries: child-care advocates and the legal weed industry.

On July 1, California’s cannabis excise tax increased from 15% to 19% as part of a political deal struck in 2022 to help stabilize the fledgling legal market. But the industry now says the increase is untenable as it faces a sharp decline in revenue and unfair competition from the growing illicit market.

An industry-sponsored bill moving through the Legislature — and already passed by the Assembly — would eliminate the tax increase and lower the rate back to 15% for the next six years. This would reduce by $180 million annually the tax revenue that the state contributes toward law enforcement, child care, services for at-risk youth and environmental cleanup.

The losses include about $81 million annually that would have specifically funded additional subsidized child-care slots for about 8,000 children from low-income families.

“They are choosing the cannabis industry over children and youth,” said Mary Ignatius, executive director of Parent Voices California, which represents parents receiving state subsidies to help pay for child care.

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Child care faces setbacks

The tension over taxes for legal weed versus child care — both industries in crisis — highlights the inherent pitfalls of funding important social services with “sin taxes,” whether it’s alcohol, weed or tobacco — funding that experts say is often unstable and unsustainable.

Engage with our community-funded journalism as we delve into child care, transitional kindergarten, health and other issues affecting children from birth through age 5.

The measure’s next stop is the Senate. All bills in the Legislature must be passed by Sept. 12, and the governor must sign them by Oct. 12.

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“We can both support the legal cannabis industry and protect child care. If the measure reaches the governor’s desk and is signed into law, we will work with the Legislature to ensure there are no cuts to child care due to this policy change,” said Diana Crofts-Pelayo, a spokesperson for Gov. Gavin Newsom.

But it’s unclear where money to backfill the losses would come from, as the state grapples with declining finances and federal funding cuts.

The money from cannabis taxes represents a fraction of California’s $7-billion annual child care budget. But as federal cuts to social services for low-income families, including Head Start, continue, any potential loss creates a sense of panic among child care advocates who say California ought to be shoring up revenue options right now — not reducing them.

“Every single dollar needs to remain in the programs that are serving our children and families. What may seem like a small amount to some is everything for advocates who are fighting for it,” said Ignatius.

The past decade has been a time of progress for child care advocates, as the state rebuilt a child care industry decimated by cuts during the Great Recession. California has more than doubled spending on child care since the recession low, added about 150,000 new subsidized child care slots, eliminated the fees paid by families, increased pay for child care workers and added a new public school grade level for 4-year-olds.

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But despite these efforts to bolster the market, California’s child care industry still suffers from low pay for workers, unaffordable costs for families, and a shortage of spaces for infants and toddlers.

The waiting list for subsidized child care slots is still so long that some parents have taken to calling it the “no hope list,” said Ignatius. Those who join the list know they could wait years before a spot opens up, and by that time their child may already be in kindergarten or beyond.

Jim Keddy, who serves on an advisory committee to help determine what programs the tax will finance, opposes the proposed reduction.

“If you don’t work to promote and hold on to a funding stream for children, someone eventually takes it from you,” said Keddy, who is also executive director of Youth Forward, a youth advocacy organization.

The cannabis industry, however, argues that while the causes the tax supports may be worthwhile, market conditions are so abysmal that it cannot weather an increase.

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“It is sad that the cannabis industry is being pit against social programs, childhood programs and educational programs,” said Jerred Kiloh, president of United Cannabis Business Assn. and owner of the Higher Path dispensary in Sherman Oaks. “The reality is, if our legal industry keeps declining, then so does their tax revenue.”

In 2022, when the cannabis industry agreed to increase the excise tax, quarterly cannabis sales were at their peak. The agreement offered the new industry temporary relief by eliminating the cultivation tax passed by voters under Proposition 64, the 2016 initiative that legalized cannabis. In exchange, state regulators would be able to increase the excise tax after three years to make the change revenue neutral.

But since then, sales have plunged to their lowest levels in five years, due in part to the growing illicit market that is siphoning off sales from legal dispensaries.

In L.A., Kiloh said that between state and local taxes, his legal dispensary customers end up paying 47% in taxes on their purchase. But if they shopped instead at any of the thousands of stores in L.A. selling cannabis products without a license, they could avoid state and local cannabis taxes entirely.

“A 30% increase in an excise tax that is already egregious is just kind of the breaking point for a lot of consumers,” said Kiloh.

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Even before the excise tax hike went into effect, just 40% of the cannabis consumed in California was obtained from the legal market, according to the California Department of Cannabis Control.

The measure to drop the excise tax, AB564, received widespread support from Assembly members, including stalwart supporters of early childhood education like Assembly Majority Leader Cecilia Aguiar-Curry (D-Winters), chair of the Legislative Women’s Caucus.

“Revenues from legal sales of cannabis are already dropping and if we keep raising the tax they’ll drop even more. That penalizes cannabis businesses who are doing the right thing and working within the legal market. And, it makes illegal sales from cartels and criminals more competitive,” she said in a statement. “We need to fund our kids’ education through the State General Fund, but if we want to supplement education and youth programs, cannabis tax dollars will only exist if we steady the legal market and go after those illegal operators.”

How reliable are sin taxes?

Lucy Dadayan, a researcher who studies sin taxes at the Tax Policy Center, a nonpartisan think tank based in Washington, D.C., said the California predicament reflects a larger problem with sin taxes.

If a sin tax is successful and consumption drops — as it has with tobacco — “the tax base shrinks. And in the case of cannabis, there’s the added wrinkle that a high tax rate can push consumers back into the illicit market, which also reduces revenue,” she said.

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This is not the first time services for the state’s youngest children have been affected by reductions in a sin tax.

In 1998, California voters slapped cigarettes with a hefty surcharge to pressure smokers to give up their habit. The state used the money to fund “First 5” organizations in every county, which are dedicated to improving the health and well-being of young children and their families. But the less people smoked over time, the less money was available for early childhood programs, and the First 5 system now finds itself confronting an existential crisis as it faces a rapidly declining revenue source.

Meanwhile, the critical social services like child care that come to depend on sin taxes tend to get more and more expensive, creating a “mismatch” in the tax structure versus the need, said Dadayan.

“In the short term, these taxes can raise a lot of money and help build public support for legalization or regulation. But in the long term, they can leave important programs vulnerable because of shifting consumption patterns,” she said.

This article is part of The Times’ early childhood education initiative, focusing on the learning and development of California children from birth to age 5. For more information about the initiative and its philanthropic funders, go to latimes.com/earlyed.

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Trump administration touts ‘most secure border in history’ as 2.5 million migrants exit US

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Trump administration touts ‘most secure border in history’ as 2.5 million migrants exit US

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The Department of Homeland Security (DHS) said Friday that more than 2.5 million illegal immigrants have left the United States since President Donald Trump returned to office this year, citing a sweeping immigration crackdown that it says led to the “most secure border in American history.”

In a year-end report highlighting the agency’s accomplishments, DHS claimed that illegal border crossings plunged 93% year-over-year, fentanyl trafficking was cut in half, and hundreds of thousands of criminal illegal immigrants were either arrested or deported, amounting to a dramatic shift from the Biden administration.

“In less than a year, President Trump has delivered some of the most historic and consequential achievements in presidential history—and this Administration is just getting started,” Homeland Security Secretary Kristi Noem said in a statement. “Under President Trump’s leadership, we are making America safe again and putting the American people first. In record-time we have secured the border, taken the fight to cartels, and arrested thousands upon thousands of criminal illegal aliens.”

EXCLUSIVE: MILLIONS OF ILLEGAL IMMIGRANTS LEAVE US IN RECORD-BREAKING YEAR UNDER TRUMP POLICIES, DHS SAYS 

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U.S. Secretary of Homeland Security Kristi Noem said Friday that President Donald Trump “has delivered some of the most historic and consequential achievements in presidential history” since he took office on Jan. 20. (Anna Moneymaker/Getty Images)

While Trump’s first year back in office was “historic,” the administration “won’t rest until the job is done,” Noem added.

Of the 2.5 million illegal immigrants that left the country since Trump took office on Jan. 20, an estimated 1.9 million self-deported and more than 622,000 were deported, according to DHS.

The Trump administration has encouraged anyone living in the United States illegally to return to their native countries using the Customs and Border Protection (CBP) Home Mobile App, which allows users to claim a complimentary plane ticket home and a $1,000 exit bonus upon their return.

BIDEN ADMIN MARKED ILLEGAL IMMIGRANT, ALLEGED MURDERER AS ‘NON-ENFORCEMENT PRIORITY,’ DHS REVEALS

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United States Customs and Border Protection sent boats to the Chicago River amid “Operation Midway Blitz” on Thursday, Sept. 25, 2025.  (Chicago Tribune/Getty Images)

CBP seized nearly 540,000 pounds of drugs this year, almost a 10% increase compared to the same time frame in 2024, DHS said, adding that the U.S. Coast Guard has retrieved roughly 470,000 pounds of cocaine, or enough to kill 177 million people.

Taxpayers have been saved more than $13 billion at DHS, the agency said, noting that several agencies, including the Federal Emergency Management Agency (FEMA), Cyber and Infrastructure Security Agency (CISA), and the Secret Service have returned “to their core missions.”

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Secretary of Homeland Security Kristi Noem touted the progress made during President Trump’s first year back in office. (Anna Moneymaker/Getty Images)

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Secretary Noem awarded $10,000 bonuses earlier this year to TSA officers and personnel who displayed exemplary service, overcame hardships, and displayed the utmost patriotism during the 43-day government shutdown.

DHS touted the administration’s achievements, asserting that “countless lives have been saved” this year and “the American people have been put first again.”

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Justice Department releases Epstein files, with redactions and omissions

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Justice Department releases Epstein files, with redactions and omissions

The Justice Department released a library of files on Friday related to Jeffrey Epstein, partially complying with a new federal law compelling their release, while acknowledging that hundreds of thousands of files remain sealed.

The portal, on the department’s website, includes videos, photos and documents from the years-long investigation of the disgraced financier and convicted sex offender, who died in federal prison in 2019. But upon an initial survey of the files, several of the documents were heavily redacted, and much of the database was unsearchable, in spite of a provision of the new law requiring a more accessible system.

The Epstein Files Transparency Act, which passed with overwhelming bipartisan support in Congress, unequivocally required the department to release its full trove of files by midnight Friday, marking 30 days since passage.

But a top official said earlier Friday that the department would miss the legal deadline Friday to release all files, protracting a scandal that has come to plague the Trump administration. Hundreds of thousands more were still under review and would take weeks more to release, said Todd Blanche, the deputy attorney general.

“I expect that we’re going to release more documents over the next couple of weeks, so today several hundred thousand and then over the next couple weeks, I expect several hundred thousand more,” Blanche told Fox News on Friday.

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The delay drew immediate condemnation from Democrats in key oversight roles.

Rep. Robert Garcia (D-Long Beach), the ranking member of the House Oversight Committee, and Rep. Jamie Raskin (D-Md.), the ranking member of the House Judiciary Committee, accused President Trump and his administration in a statement Friday of “violating federal law as they continue covering up the facts and the evidence about Jeffrey Epstein’s decades-long, billion-dollar, international sex trafficking ring,” and said they were “examining all legal options.”

The delay also drew criticism from some Republicans.

“My goodness, what is in the Epstein files?” Rep. Marjorie Taylor Greene (R-Ga.), who is leaving Congress next month, wrote on X. “Release all the files. It’s literally the law.”

“Time’s up. Release the files,” Rep. Thomas Massie (R-Ky.) wrote on X.

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Already, congressional efforts to force the release of documents from the FBI’s investigations into Epstein have produced a trove of the disgraced financier’s emails and other records from his estate.

Some made reference to Trump and added to a long-evolving portrait of the social relationship that Epstein and Trump shared for years, before what Trump has described as a falling out.

In one email in early 2019, during Trump’s first term in the White House, Epstein wrote to author and journalist Michael Wolff that Trump “knew about the girls.”

In a 2011 email to Ghislaine Maxwell, who was later convicted of conspiring with Epstein to help him sexually abuse young girls, Epstein wrote, “I want you to realize that the dog that hasn’t barked is trump. [Victim] spent hours at my house with him … he has never once been mentioned.”

Maxwell responded: “I have been thinking about that…”

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Trump has strongly denied any wrongdoing, and downplayed the importance of the files. He has also intermittently worked to block their release, even while suggesting publicly that he would not be opposed to it.

His administration’s resistance to releasing all of the FBI’s files, and fumbling with their reasons for withholding documents, was overcome only after Republican lawmakers broke off and joined Democrats in passing the transparency measure.

The resistance has also riled many in the president’s base, with their intrigue and anger over the files remaining stickier and harder to shake for Trump than any other political vulnerability.

It remained unclear Friday afternoon what additional revelations would come from the anticipated dump. Among the files that were released, extensive redactions were expected to shield victims, as well as references to individuals and entities that could be the subject of ongoing investigations or matters of national security.

That could include mentions of Trump, experts said, who was a private citizen over the course of his infamous friendship with Epstein through the mid-2000s.

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Epstein was convicted in 2008 of procuring a child for prostitution in Florida, but served only 13 months in custody in what was considered a sweetheart plea deal that saved him a potential life sentence. He was charged in 2019 with sex trafficking, and died in federal custody at a Manhattan jail awaiting trial. Epstein was alleged to have abused over 200 women and girls.

Many of his victims argued in support of the release of documents, but administration officials have cited their privacy as a primary excuse for delaying the release — something Blanche reiterated Friday.

“There’s a lot of eyes looking at these and we want to make sure that when we do produce the materials we are producing, that we are protecting every single victim,” Blanche said, noting that Trump had signed the law just 30 days prior.

“And we have been working tirelessly since that day to make sure that we get every single document that we have within the Department of Justice, review it and get it to the American public,” he said.

Trump had lobbied aggressively against the Epstein Files Transparency Act, unsuccessfully pressuring House Republican lawmakers not to join a discharge petition that would force a vote on the matter over the wishes of House Speaker Mike Johnson (R-La.). He ultimately signed the bill into law after it passed both chambers with veto-proof majorities.

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Rep. Ro Khanna (D-Fremont), who introduced the House bill requiring the release of the files, warned that the Justice Department under future administrations could pursue legal action against current officials who work to obstruct the release of any of the files, contravening the letter of the new law.

“Let me be very clear, we need a full release,” Khanna said. “Anyone who tampers with these documents, or conceals documents, or engages in excessive redaction, will be prosecuted because of obstruction of justice.”

Given Democrats’ desire to keep the issue alive politically, and the intense interest in the matter from voters on both ends of the political spectrum, the fact that the Justice Department failed to meet the Friday deadline in full was likely to stoke continued agitation for the documents’ release in coming days.

In their statement Friday, Garcia and Raskin hammered on Trump administration officials — including Atty. Gen. Pam Bondi — for allegedly interfering in the release of records.

“For months, Pam Bondi has denied survivors the transparency and accountability they have demanded and deserve and has defied the Oversight Committee’s subpoena,” they said. “The Department of Justice is now making clear it intends to defy Congress itself.”

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Among other things, they called out the Justice Department’s decision to move Maxwell, who is serving a 20-year sentence for sex trafficking, to a minimum security prison after she met with Blanche in July.

“The survivors of this nightmare deserve justice, the co-conspirators must be held accountable, and the American people deserve complete transparency from DOJ,” Garcia and Raskin said.

Sen. Adam Schiff (D-Calif.), in response to Blanche saying all the files wouldn’t be released Friday, said the transparency act “is clear: while protecting survivors, ALL of these records are required to be released today. Not just some.”

“The Trump administration can’t move the goalposts,” Schiff wrote on X. “They’re cemented in law.”

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Video: Kennedy Center Board Votes to Add Trump to Its Name

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Video: Kennedy Center Board Votes to Add Trump to Its Name

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Kennedy Center Board Votes to Add Trump to Its Name

President Trump’s handpicked board of trustees announced that the John F. Kennedy Center for the Performing Arts would be renamed the Trump-Kennedy Center, a change that may need Congress’s approval.

Reporter: “She just posted on X, your press secretary, [Karoline Leavitt,] that the board members of the Kennedy Center voted unanimously to rename it the Trump-Kennedy Center. What is your reaction to that?” “Well, I was honored by it. The board is a very distinguished board, most distinguished people in the country, and I was surprised by it. I was honored by it.” “Thank you very much, everybody. And I’ll tell you what: the Trump-Kennedy Center, I mean —” [laughs] “Kennedy Center — I’m sorry. I’m sorry.” [cheers] “Wow, this is terribly embarrassing.” “They don’t have the power to do it. Only Congress can rename the Kennedy Center. How does that actually help the American people, who’ve already been convinced that Donald Trump is not focused on making their life better? The whole thing is extraordinary.”

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President Trump’s handpicked board of trustees announced that the John F. Kennedy Center for the Performing Arts would be renamed the Trump-Kennedy Center, a change that may need Congress’s approval.

By Axel Boada

December 19, 2025

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