California Treasurer Fiona Ma Calls Prop 64 a ‘Complete Disaster,’ Wants Cannabis Industry to Organize for Ballot Overhaul

California State Treasurer Fiona Ma delivered a stark assessment of the state’s legal cannabis market Wednesday at IgniteIt’s Market Spotlight: California 2026 in Los Angeles, calling Proposition 64 a “complete disaster” and offering to help organize an effort to put changes to the legalization framework before voters.

Speaking in an exclusive conversation moderated by Amy O’Gorman Jenkins, founder and president of Precision Advocacy Group, Ma said California’s regulated industry has fallen far from its position before adult-use legalization.

“Ten years later, it’s a complete disaster,” Ma said. “California was the number one cannabis-producing state in terms of quality and being trusted by the farmers, similar to our wine industry, and now it’s pretty much — it’s almost dead.”

“The legal business is dead,” she added.

Ma, who is running for lieutenant governor, went further than diagnosing the problem. She told attendees she is willing to help organize an effort to change Proposition 64 and said she can begin convening cannabis stakeholders immediately.

“I will help spearhead trying to get something back on the ballot to change what is happening,” Ma said.

Her proposed route would avoid an expensive signature-gathering campaign. Instead, Ma floated bringing a proposal through the California Legislature, securing the required two-thirds support and the governor’s signature, and then sending the measure to voters.

“There is not one industry anymore,” Ma said, pointing to the proliferation of associations and competing interests within cannabis. She said one of her priorities would be getting those groups into the same room to determine what changes they can collectively support.

“My thinking is we go through the Legislature, get two-thirds of the votes, get the governor to sign the bill, and then it would go on the ballot,” Ma said. “That’s the cheapest way, but I do need cooperation.”

The comments represent something more concrete than another call for cannabis reform in Sacramento. Ma asked attendees interested in joining a stakeholder working group to contact her office and said she wants to begin compiling participants and convening meetings around California.

“I can start convening right now,” she said.

Special thanks to GreenState editor Rachelle Gordon for reporting from the floor at IgniteIt’s Market Spotlight: California 2026 and providing the audio and photos used in this story.

Ma Says California Taxed Cannabis Too Heavily From the Start

Taxation featured prominently in Ma’s diagnosis.

When the architects of Proposition 64 approached her office before legalization, Ma said she recommended a substantially lower tax burden.

“I think a reasonable tax, maybe 3%, maybe 5%,” she recalled telling them.

Instead, California ultimately combined state cannabis taxes with other state and local obligations.

“It’s too much,” Ma said. “Nobody’s gonna pay that much.”

Asked later what the appropriate tax rate should be today, Ma stopped short of endorsing a specific figure.

“I don’t know what the tax rate should be, but it is definitely too high,” she said.

Ma also claimed that a large share of the industry is not paying taxes, leaving compliant operators carrying a disproportionate burden.

“We haven’t been collecting the taxes. Eighty percent are not paying taxes, so the burden is falling on just a very small percentage,” Ma said, adding that even those businesses are struggling and laying off employees.

Enforcement And Oversupply Join Taxes On The List

Ma’s criticism was not limited to taxation.

“Clearly enforcement is one of the number one issues,” she said, questioning whether the state’s current enforcement structure is producing the intended results.

“I don’t know if it’s working or not, but something has to change in the way things are working.”

She also raised licensing and supply.

Ma said California needs to consider how licenses are allocated so that operators cannot simply enter and “flood the market.”

“Supply and demand is always part of any type of business,” she said. “So there are a lot of things that need to be fixed.”

The moderator pointed to a state economic analysis estimating a market split of roughly 60% illicit to 40% legal and suggested the illicit share could be even larger. Ma’s comments repeatedly returned to the difficulty licensed businesses face when they must absorb regulatory costs while competing against sellers operating outside that system.

Consumer Safety Without Crushing The Legal Market

For Ma, the original rationale for legalization still matters.

Consumers supported Proposition 64 in part because regulated cannabis promised testing, accurate labeling, and greater certainty about what they were purchasing, she said.

“I do think people passed Prop 64 because they wanted their product tested,” Ma said. “They wanted the product properly labeled.”

But the growth of online purchasing has complicated the distinction between licensed and unlicensed sellers, she argued.

“You don’t know whether they’re really legal or not legal,” Ma said. “Their product is safe or not safe.”

She suggested that changing consumer behavior could also require policymakers to rethink the role of local control and brick-and-mortar cannabis retail.

“Maybe we don’t need to have as many brick-and-mortar stores,” she said.

Social Equity Draws A Challenge From The Floor

The discussion became particularly pointed when it turned to social equity.

Asked whether California had fulfilled the promises made to communities targeted by prohibition, Ma argued that social-equity operators were among those who struggled earliest under legalization.

“Those are the folks that honestly dropped out first,” she said, describing conflicts that emerged when larger sources of capital partnered with equity license holders.

Ma then suggested she did not think many remained in the market.

An attendee immediately corrected her.

“There are plenty of people,” the attendee said.

Ma’s response was immediate: “Okay. So you need to get together.”

When attendees told her equity operators remained active in Los Angeles, San Francisco and the Bay Area, Ma replied: “We gotta have a conversation.”

The exchange underscored one of the central themes running through the discussion: Ma believes California cannabis has not only a policy problem but an organizational problem.

Why Ma Thinks Voters May Have To Fix Prop 64

California lawmakers have been able to modify pieces of cannabis policy created through ordinary legislation. Proposition 64 presents a more difficult problem because voters approved the initiative directly.

Ma contrasted the two.

She pointed to California’s elimination of a 10% penalty that had once applied when cannabis businesses paid taxes in cash as an example of something lawmakers could change legislatively.

“Prop 64, all the things that are prescribed in Prop 64, we cannot change easily,” Ma said. “That’s why we’re saying we have to go back to the ballot.”

Getting there, however, would require an industry notorious for competing associations, constituencies and policy priorities to agree on what it actually wants changed.

Ma made clear she does not intend to spend the political capital necessary unless operators are willing to cooperate.

“If people don’t want to do this, and there’s going to be outside forces trying to kill a bill that goes to Legislature, I’m just not going to do it,” she said. “It’s going to require a lot of time and effort.”

From Cash Tax Payments To Cannabis Banking

Ma’s relationship with the industry predates adult-use legalization.

She recalled encountering medical cannabis businesses after being elected to California’s State Board of Equalization, when the agency was responsible for collecting taxes from dispensaries.

According to Ma, tax officials would sometimes estimate dispensary liabilities by observing customer traffic from outside the business and extrapolating revenue.

“That’s not really scientific,” Ma recalled thinking.

That experience led her deeper into the industry’s banking problem. Cannabis operators had limited banking and credit-card access, yet were still expected to navigate audits and tax obligations.

“I probably have like a master’s in cannabis now because once I go down a rabbit hole and I don’t understand one thing, it leads to another,” Ma said.

She said the experience eventually led to her support for federal cannabis banking reform.

Ma also recalled accompanying a Sacramento medical cannabis dispensary operator to pay taxes carrying a suitcase of cash.

“That’s the way I learned,” she said.

Banking remains part of her policy argument today. Although cannabis does not formally fall under the state treasurer’s responsibilities, Ma said she used the office to remain involved because of her history with the issue and recently held a hearing on the state of California cannabis.

She wants her successor to continue using the office to advocate for improved banking access.

‘Show Up’

Ma also had a message for operators waiting for Sacramento or Washington to solve the industry’s problems without sustained pressure from businesses themselves.

“Go lobby your Congressperson,” she said. “Advocate. Write letters. Show up. Support. Whatever it takes.”

“The squeaky wheel really does get the grease in government,” she added.

Operators need to bring lawmakers their stories, request meetings, and invite elected officials into their facilities, Ma argued.

“If nobody in this room says that there’s a problem with the cannabis industry, if we try to run a bill, everyone’s going to be like, ‘Why are we running a bill? I didn’t know this was the priority.’”

Ma said she intends to apply a similar approach herself. Asked how she might use the lieutenant governor’s role to address the illicit market, she acknowledged she did not yet have an answer and wanted to get back into cannabis-producing communities before developing one.

“I want to come. I want to see. I want to listen. I want to learn,” she said. “My decisions are going to be based on what is actually happening in the field.”

“I don’t sit in my office,” she added.

A Cannabis Working Group Could Start Now

The most consequential part of Ma’s appearance may therefore be what happens after it.

She asked operators interested in a Proposition 64 or cannabis working group to contact her office. Rather than requiring businesses to travel to Sacramento, Ma said she could convene stakeholders in Los Angeles, San Francisco and elsewhere, with virtual participation available as well.

“I’d like to come to you,” she said. “I don’t need you to come to Sacramento.”

But she attached a condition: competing factions need to be willing to sit together.

“This shouldn’t be like, ‘We hate this person. We’re not going to sit in a room with that person,’” Ma said, warning against groups opposing proposals simply because they originated with another faction of the industry.

“I would like this to be as open a process,” she said. “But again, we need everyone to come together.”

For California operators, that turns a familiar diagnosis — high taxes, illicit competition, difficult access to capital, enforcement problems and a fragmented industry — into a more immediate political test.

Ma is offering to help open a path toward rewriting the framework. The industry would first have to decide what it wants rewritten.

“I’m very, very serious,” Ma told attendees. “I can start convening right now.”

Her final goal was equally direct:

“Let’s make California the number one industry again.”

The cannabis policy debate heads next to Washington, D.C. IgniteIt’s Capital & Policy Summit on Nov. 18 will bring cannabis executives, investors and policy leaders together at the Grand Hyatt Washington to discuss federal rescheduling, banking, taxes and the regulatory decisions shaping the industry. Learn more and register for the Capital & Policy Summit.