San Francisco’s Board of Supervisors made history this week with an 8-2 vote to eliminate the city’s local cannabis tax for an unprecedented 10 years, creating a decade of stability for an industry struggling under the weight of California’s overregulation and overtaxation of cannabis.
In doing so, San Francisco has set itself apart from every major city in the state – especially Los Angeles, which imposes a 10% local cannabis tax that has contributed to declining legal sales, widespread business closures, large volumes of unpaid taxes and the continued expansion of the illicit market. Los Angeles is now considering a cannabis tax amnesty program, a clear acknowledgment of how much uncollectible tax its policies have produced.
At a time when California cities tax cannabis much more aggressively than local jurisdictions in other states, San Francisco has chosen a different approach, one grounded in the belief that legal cannabis cannot survive if governments treat it primarily as a revenue source rather than as a critical medical and economic sector for its citizens.
The decision is deeply connected to San Francisco’s long history of leadership in cannabis policy. That leadership first emerged in the 1980s during the HIV and AIDS epidemic, when patients discovered that cannabis provided relief from immense suffering at a time when conventional treatments often failed. Dennis Peron and fellow activists, working through the Castro Buyers Club, transformed these experiences into political momentum. They led the campaign for Measure P in 1991, which made medical cannabis San Francisco’s lowest law enforcement priority and formally recognized its therapeutic value.
Five years later, many of the same activists helped pass Proposition 215, the nation’s first statewide medical cannabis law. Through these efforts, San Francisco reintroduced the medical value of cannabis to the United States after decades of federal prohibition and disinformation. The board’s action this week reaffirms the city’s longstanding belief that cannabis is medicine and that affordability is essential for access.
In a city facing an immense budget shortfall, the board’s decision to remove a tax rather than increase taxes is particularly notable. Supervisors recognized that raising cannabis taxes would depress legal sales, just as the state’s recent cannabis excise tax increase contributed to a significant decline in statewide sales in the third quarter of 2025, before it was rescinded.
The vote also reflects a meaningful political evolution in San Francisco. For much of the past decade, divisions between the board’s progressive bloc and its more moderate wing frequently prevented major policy agreements from taking shape. But, on cannabis, something different happened: The board found consensus.
Notably, progressive Supervisors Chyanne Chen and Jackie Fielder crossed the usual ideological lines and joined with moderates to support the 10-year tax suspension. Their decision signaled a willingness to prioritize economic realities, public health, and fairness over entrenched factional positions, and it effectively left Supervisors Connie Chan and Shamann Walton standing alone in opposition. Chen and Fielder’s pragmatism was an essential part of the outcome, and their votes demonstrated a seriousness and independence that enriched the credibility of the final result.
State policymakers, by contrast, have been slow to confront the challenges facing California’s legal cannabis operators. High taxes, onerous regulatory burdens, and a lack of meaningful enforcement against illicit activity (including intoxicating hemp-derived products) have combined to suppress the legal cannabis market in California.
Unlike the state, local governments bear these burdens directly. Cities must contend with empty storefronts, job losses, and illicit cannabis operators filling the vacuum created by policy failure – circumstances that state officials, more insulated from day-to-day impacts, often fail to fully appreciate. This proximity gives local jurisdictions a clearer understanding of what interventions are likely to be effective. San Francisco’s 10-year tax suspension reflects that practical knowledge and demonstrates that cities in California can take steps to stabilize their cannabis markets even when statewide reforms lag.
San Francisco’s shift has the potential to influence other cities, most notably neighboring Berkeley, with which it shares a deep and parallel medical-cannabis lineage. Like San Francisco, Berkeley was a national pioneer in recognizing cannabis as a therapeutic substance in the early 1990s, grounding its policies in compassion, patient access, and a public-health orientation rather than criminal enforcement. This shared heritage helps explain why Berkeley maintained a zero percent cannabis tax for many years, reflecting the principle that affordability is inseparable from access.
Although Berkeley imposed a cannabis tax in July 2025, the city is already experiencing pressure to reconsider that decision in 2026, with Councilmember Terry Taplin appearing to lead the charge. Practically, a higher tax rate risks pushing Berkeley cannabis consumers across the Bay to San Francisco. Philosophically, Berkeley’s commitments remain closely aligned with San Francisco’s: Both cities have long seen cannabis through the lens of patient care, harm reduction, and community health.
As someone whose own cannabis advocacy began 20 years ago as a UC Berkeley undergraduate, I know how deeply these values are embedded in the city’s political culture. Berkeley is a natural partner for the expansion of San Francisco’s zero-tax model in 2026, and its participation would strengthen the foundation for broader reform across California.
If San Francisco and Berkeley adopt a unified approach, they can create the most coherent and values-driven cannabis policy corridor in the state. Their alignment would not only stabilize their respective markets but also demonstrate a workable model for other jurisdictions to emulate.
California’s cannabis challenges do not stem from insufficient demand; they arise from a regulatory structure that is too expensive, too complex, and misaligned with consumer behavior. Cities that pilot effective policies can help shift this structure from the bottom up. A successful model in the Bay Area could quickly become a template for municipalities across the state.
San Francisco’s vote shows that local governments are capable of crafting solutions where state policymakers have failed. Cities can identify economic trends early, adapt policies to real-world conditions, strengthen legal businesses, and suppress illicit activity through targeted reforms. Above all, this vote demonstrates that a bottom-up, city-led approach is not only viable but essential if California hopes to build a sustainable legal cannabis market.
The board’s action must be reaffirmed at a second reading on Dec. 16 and then signed by the mayor. But the broad support already shown, combined with the urgency facing the legal cannabis sector, suggests that the measure will advance. Once finalized, San Francisco will stand as the clearest example of how local action can stabilize an industry that has struggled for far too long.
More than a tax change, this vote revives the spirit that first made San Francisco the center of the medical cannabis movement. If the rest of California follows, beginning with Berkeley, the state may finally move beyond the failures of the past decade and toward a system that reflects its values as much as its history.
