Woody Harrelson and Bill Maher smoked joints inside their own dispensary on April 20 and spent a chunk of the visit criticizing how California taxes the legal cannabis market, arguing the state has made licensed operators’ lives harder than they need to be.

The two co-own The Woods, a dispensary and consumption lounge in West Hollywood. They filmed an episode of Maher’s podcast, Club Random, on-site for the occasion. Their complaints were covered by Marijuana Moment, and they carry at least some credibility given that Harrelson and Maher aren’t just commentators here. They own the place.

“California sucks as far as, look, all businesses, but certainly this one,” Maher said on the episode.

Harrelson put a sharper point on it. “They treat it like you’re lucky that we allow you to do this, and so we’re going to tax you 35 percent, which is way more, it’s more than double anything,” he said. He couldn’t pin down exactly what gets taxed less, floating guns and beer as examples of categories facing lighter rates. “It’s ridiculous that they can just tax the fuck out of you and make it so hard,” Harrelson said.

The underlying math isn’t pure fiction. California charges a 15 percent state excise tax at the point of sale, and local excise taxes get layered on top of that, varying by city or county. Standard sales taxes apply too. Before any product even lands on a shelf, there are cultivation taxes, licensing fees, and supply chain costs already baked in. The Department of Cannabis Control notes that licensed operators must navigate tax obligations across multiple state and local jurisdictions. Critics of the structure say it’s precisely why so many consumers still buy from unlicensed sources. Why pay 20 percent more in taxes when the guy down the street doesn’t charge any?

Harrelson also hit the 280E issue, arguing that cannabis businesses can’t write off ordinary expenses. He’s right on the federal level. Section 280E of the federal tax code bars marijuana companies from deducting standard business costs because cannabis remains a Schedule I substance under federal law. Rent, payroll, utilities — none of it. That’s a real and significant disadvantage compared to any other retail business.

The catch is that California decoupled its own tax code from 280E, meaning operators can claim those deductions on their state returns even when they can’t federally. So Harrelson’s complaint lands harder at the federal level than at the state level specifically, though the federal burden alone is enough to gut margins.

Maher circled back to the banking situation that’s dogged the industry since California voters approved Proposition 64 in 2016. “For the longest time, it was a very risky business because you couldn’t put the money in the bank, right?” he said. He described how banks refused to touch cannabis revenue during those years, leaving dispensaries sitting on piles of physical cash. “And everybody would have truckloads of cash around,” he said, noting the obvious consequence: dispensaries became robbery targets.

That’s not ancient history either. The California Department of Tax and Fee Administration has tracked cannabis tax revenue since the state’s adult-use market launched, and the numbers show just how much is at stake. California’s legal cannabis market generated $1.1 billion in excise tax revenue in 2024, up from the early stumbles following the 2016 ballot measure. But licensed operators’ share of the overall market has stayed under pressure. Estimates put the illicit market at somewhere around 35 percent of total cannabis sales statewide, a figure that hasn’t budged much despite a decade of legalization.

There are now 64 cannabis consumption lounges licensed in California, of which The Woods is one. The lounge model was supposed to give consumers a legal, social space to use cannabis the way a bar handles alcohol. Whether that’s enough to pull people away from cheaper, untaxed options is still an open question.

What Harrelson and Maher said on a podcast won’t move DCC policy. But two celebrity business owners publicly calling California’s tax structure punishing, while actually sitting inside the business they own, makes for a harder argument to dismiss than a tweet.