By Colin Lecher, CalMatters

This story was originally published by CalMatters. Sign up for their newsletters.

A Los Angeles jury has found the parent companies of YouTube and Facebook liable for a teen’s mental distress in a closely-watched trial over social media addiction. 

The jury awarded $3 million to the plaintiff, a young woman identified as KGM, and her mother, according to NPR, which noted Facebook parent company Meta would be responsible for about 70% of that amount and that the companies could face future penalties as well. The family had accused the platforms of willfully making their products addictive and targeting teens, despite internal research showing it could damage their mental health. 

The Los Angeles Superior Court decision is among the first in a wave of hundreds of suits by schools, attorneys general, and others, making personal injury claims about major tech companies’ alleged recklessness. 

A New Mexico jury recently found Meta liable on similar claims and the company was ordered to pay $375 million in damages. Meta said it would appeal that decision. Meanwhile, a case is also ongoing in a federal court based in California.

“We disagree with the verdict and plan to appeal,” José Castañeda, a Google spokesperson, said in a statement. “This case misunderstands YouTube, which is a responsibly built streaming platform, not a social media site.” 

Erin Logan, a spokesperson for Meta, said, “We respectfully disagree with the verdict and are evaluating our legal options.”

Online child safety advocates, meanwhile, immediately cheered the ruling. 

“For too many years, kids have suffered immeasurable harm from social media, while the owners of these tech companies have reaped billions in profits,” John M. Bennett, Director of the California Initiative for Technology and Democracy, said in a statement, calling the tech industry’s business model “fundamentally exploitative, addicting young children in order to create lifelong consumers, no matter the cost to their health or the damage to their lives.”

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With a $20 panini press she got off Facebook marketplace and a hand-crank plastic shredder, Sacramento artist Sam Mejia is transforming everyday plastic waste into functional art.

Mejia has always been a maker, but she said she started noticing how much plastic waste was piling up around her, especially colorful detergent bottles and containers that aren’t always easy to recycle. That pushed her toward giving number two plastic a second life.

Now she runs EcoPress, a small Sacramento startup that melts down donated HDPE plastic and turns it into early prototypes for furniture and art. Mejia sorts, cleans and processes the plastic herself, heating it in small batches and pressing it into thick, marbled sheets that can be cut and shaped into usable pieces.

“Right now, we have several locations of our collection bins located all over the Sacramento area where we’re inviting the public to bring in their number two plastic, donate it to our collection bin, and then I’ll go through, collect them, sort them, clean them, process them, start shredding, and melting,” Mejia said.

EcoPress hopes to gather enough material this year to build its first full-size piece—a table with matching chairs. To show what that could look like, Mejia created miniature models cut from recycled plastic slabs.

Miniature chair prototypes made from recycled plastics sit on display on Nov. 14, 2025.Tony Rodriguez/CapRadio

“We are hoping to collect 50 pounds of number two plastic so that way we can make a large three-by-three-foot table along with matching four chairs, and so I made little mini scale models of the chairs that I am hoping to be able to make once we get more plastic,” she said.

The project is rooted in a mission to keep plastics out of the wrong places, like local waterways. Mejia says she was inspired by the Precious Plastic movement and wanted to create a Sacramento version that shows people exactly what they can do with the plastic they throw away.

Hope Suson, who runs a sustainable product store in Old Sacramento called Ecojoyous, said she rarely carries any plastic items. But said she would make an exception for EcoPress items because the art is made from recycled material, and not newly made plastic.

“We are not here to sell plastic. There are places that sell plastic and that is not what we are about,” Suson said. “But [EcoPress] is about recycling plastic, and that gives it new purpose.”

A sheet of melted number two plastic on Nov. 14, 2025. The startup melts donated household plastics into colorful slabs that can be cut and shaped into new products.Tony Rodriguez/CapRadio

EcoPress has placed collection bins across the region and is pushing residents to check their recycling symbols before tossing containers. Aiza Leon with EcoPress said the goal is to move past the idea that recycling ends once something is dropped in the blue bin.

“Instead of throwing that … plastic into the recycling bin, wishing that somebody else is going to take care of it, we’re actually going to take care of it. So that is our mission right now,” Leon said.

Leon said EcoPress wants to intercept plastic before it’s disposed of and keep it circulating locally.

EcoPress shreds down detergent bottles, lotion containers and other number two plastics into hardened panels for future designs on Nov. 14, 2025.Tony Rodriguez/CapRadio

“We know people already recycle. And especially coming with this holiday season, there is so much opportunity for that plastic to come back to us and to stay in Sacramento too as new products when the store opens next year,” she said.

The team is also encouraging neighborhoods, businesses and community spaces to partner with EcoPress by hosting collection bins.

“If anyone out there is interested in partnering with EcoPress Sacramento on having a collection bin at your site, we are happy to work with you. We will provide the bin, we will do weekly cleanups of the bin, or as much as you need,” Leon said.

Mejia is currently a finalist in the Downtown Sacramento Partnership’s Calling All Dreamers program, which helps new entrepreneurs secure a downtown storefront. She hopes to open one in 2026 where people can watch the recycling process, try the hand-crank shredder, and take workshops on making new items from household waste.

By Yue Stella Yu and Malena Carollo, CalMatters

This story was originally published by CalMatters. Sign up for their newsletters.

Upon hearing her husband’s call for help, Cynthia Halliday came flying upstairs. He was rushing toward the outdoor deck, gasping for air. He was having a heart attack.

Halliday held him and dialed 911 with her cellphone. The dispatcher answered, but within seconds, she said, the call disconnected due to poor reception. Halliday screamed for help, loud enough for her next-door neighbor Larry Williams to hear and dial from his copper landline. This time, it got through.

Halliday’s husband did not survive. But on that day in 2018, Halliday became convinced that copper landlines were her best shot at getting help during emergencies, especially where she lives in Hacienda, a tight-knit community deep in the rural forests of Northern California. 

Those landlines, however, are what AT&T — the largest copper landline provider in California — is pushing to retire nationwide. 

As California’s largest “carrier of last resort,” AT&T is required by law to provide basic phone service, typically copper landlines, to any Californian who asks for it, with lower-income customers qualifying for a discount. It provides 75% of the state’s last-resort phone service, accounting for about 500,000 Californians and 5% of all its California customers.

Subsidies to support copper landlines have declined sharply. Critics say AT&T wants to shed them to avoid their billion-dollar annual cost  and boost profits with lucrative services like fiber.

For the past two years, AT&T has tried unsuccessfully to bow out of that obligation in many areas of the state, spending heavily to influence state regulations and laws. This year, it spent at least $4.5 million on lobbying as it tried and failed to pass a bill that would have allowed AT&T to cut copper services in certain areas in exchange for agreeing to expand its fiber services. Its industry ally, USTelecom, assembled a “grassroots” coalition to support the legislation, with more than 80% of coalition members having ties to AT&T, CalMatters found.

The company’s efforts to shed copper landlines show no signs of stopping. An ongoing process by the utilities regulators seeks to determine key components of the carrier of last resort requirements. And Assemblymember Tina McKinnor, an Inglewood Democrat, told CalMatters she intends to revive the bill that died this year.

It’s unclear just how many Californians would be impacted if AT&T gets its way. A map AT&T submitted to California utilities regulators as part of a failed 2023 effort marked 1,133 towns across 53 of California’s counties, including rural communities such as Hacienda, as territories the company sought to withdraw from. 

AT&T said it only wants to pull out of communities with multiple alternatives, such as wireless and fixed broadband. It argued it’s not cost-effective to maintain expensive copper lines for many of its customers, the number of which has dwindled over the years. Doing away with the obligation would free up money to invest in more advanced technologies, such as fiber optics, it said. 

“No Californian will be left without reliable phone service in their homes, including 911 services,” said Terri Baca, vice president of legislative affairs at AT&T, at an April legislative hearing.

But critics say the reliability of those alternatives isn’t guaranteed, and that AT&T’s push would pad shareholders’ pockets at the expense of a lifeline for those communities, especially during power outages and natural disasters. Statewide, more than one million 911 calls are made each year over landlines, according to the state’s Office of Emergency Services. 

If AT&T’s goal is to upgrade services, it should build them out before retiring copper, opponents argue.

“If they wanted to replace copper with fiber right now, there’s nothing stopping them,” said Phil Grosse, a Hacienda resident and the North Coast regional chair of the California Democratic Party’s rural caucus.

The debate has intensified in California in recent years, partly because it is a significant holdout in AT&T’s plan to abandon copper networks across the country.

Spokespeople for USTelecom, its coalition Californians for a Connected Future, and AT&T did not specify how they recruited coalition members or why most members had ties to AT&T. Instead, they sent general statements calling the state’s carrier of last resort obligation archaic.

“Our goal is to deliver the best possible experience to our customers, now and into the future,” said Megan Ketterer of AT&T.

Cara Duckworth, a spokesperson for USTelecom, told CalMatters “even if we answered all the questions I’m not sure we’d get a fair shake.”

“Many of our providers would love to no longer have to spend money maintaining old copper equipment and would much rather invest that money in next (generation) networks that better serve consumers,” she said. 

Some rural Californians say they fear AT&T will eventually wear state lawmakers down to that goal.

“Rural communities don’t have the big money to compete with AT&T. That’s why we hire legislators to look out for us,” Grosse said in a June letter to state lawmakers.

‘Predictably unpredictable’

Kathy Yerger, 67, lives among redwoods so dense that wireless Internet providers have refused to service her Hacienda home. 

“It would be like trying to find a golf ball in the sky,” she remembered one provider telling her. Another, upon learning her address, chuckled and told her “no, you are not on the list,” she said.

Although she has a cellphone, Yerger has learned not to rely on it. 

“If I put the phone in the window and hope the stars line up and the trees don’t blow, yes I can (try to connect),” she said. “It’s predictably unpredictable.”

Like many of her neighbors, Yerger’s best — if not only — bet at communicating with the outside world is her copper landline. Even that line fails sometimes when water corrodes the old copper wires. But it’s still the most reliable option she has, especially during emergencies and natural disasters.

In Hacienda, frequent mudslides and floods during rainy winters have washed away homes, sparked power outages, and sometimes claimed lives. The 2020 Walbridge fire, which scorched more than 55,000 acres of Sonoma County, got within a quarter mile of Yerger’s house. The only notification was word of mouth from the local fire department deputies and a neighbor calling her landline, she said. 

Few reliable alternatives remain during those disasters. Cellphone services, which many Californians rely on to receive emergency alerts, can quickly fail. Fiber optic lines, while more resilient, require backup power along the network and are expensive to install. Voice-over-Internet-Protocol phones, a landline alternative, depend on the internet and home electricity and thus fail during power outages. 

The alternatives are so unreliable during emergencies that Hacienda residents created walking evacuation routes along the area’s ragged switchbacks. They set up their own walkie-talkie network, drilling weekly. They even discussed using bullhorns and sirens to alert each other if a wildfire comes through, Grosse said. The hope is to reach enough people for someone with a copper landline to call for help. 

“There’s no copper fetish here,” Grosse said. “When a reliable alternative appears, I’d really be happy to give (it) up.”

A technology upgrade or a profit grab?

Underlying AT&T’s push to retire copper is money. Telecom companies previously received subsidies from state and federal governments for last-resort services, but those payments have been reduced or eliminated in recent decades. California, for example, reduced its subsidy fund from $400 million in 1996 to about $20 million currently, according to a USTelecom regulatory filing. 

This leaves companies providing landlines with a larger share of the bill for maintaining such networks. For AT&T, that’s about $1 billion each year in California alone.

Despite this, AT&T remains profitable. An October filing with the U.S. Securities and Exchange Commission showed a $9.7 billion profit so far this year. And fiber is one of its profit drivers, bringing in $2.2 billion, up nearly 17% from the same time last year.

“They’re looking for a way to boost profits,” said Ernesto Falcon, communications and broadband program manager for the California Public Advocates Office.“They can’t legally do that unless you get rid of (the carrier of last resort requirements).”

AT&T representatives have repeatedly insisted that the company’s efforts to pull out as a carrier of last resort are to modernize telecommunication. In public hearings, they promised that AT&T’s request would not threaten copper landlines in areas without other viable options. 

So far, state regulators and lawmakers aren’t convinced. 

The California Public Utilities Commission rejected a March 2023 petition by AT&T that would have allowed it to pull out copper lines only in service areas where customers have telephone service alternatives. The application claimed 99.7% of its customers had access to at least three alternatives, with 99.9% having access to at least two.

After the rejection, the company turned to the state Legislature, sponsoring bills to relinquish its obligation. 

Last year, an AT&T-backed bill would have granted the company relief if it notified the commission of certain census blocks with no customers or with multiple phone service alternatives. The bill, authored by McKinnor, died without a hearing.

McKinnor reintroduced the measure as Assembly Bill 470 this spring. In its final form, the bill would have allowed AT&T to pull copper lines out of open spaces and “well served” areas — those with at least three other service providers — if it promised, among other requirements, to expand advanced fiber optics in six years to three times as many households as it is currently required to serve and to help its customers transition to other services. 

The bill would have required the public utilities commission to map out well-served areas using the Federal Communications Commission’s National Broadband Map and the federal Broadband Equity Access and Deployment Program — both tools to measure internet, not telephone, connectivity. The map was criticized by opponents of the bill, including the California Public Advocate’s Office, as not being an accurate representation of coverage.

“This bill does not leave any customer behind. This isn’t about taking something away, it’s about ensuring that we have a plan to migrate Californians to superior services,” Baca said in a July hearing.

McKinnor told CalMatters the measure was her “out of the box, progressive” way to get AT&T to pay for infrastructure upgrades instead of spending taxpayer dollars.

But critics say some areas, such as Hacienda, could count as well served while still lacking quality access. There’s no guarantee that other providers would offer reliable alternatives, and the legislation would not have required the fiber buildout to be in the same communities where AT&T seeks to pull out, they said. Many Hacienda households are listed on the federal broadband map as having four internet providers available — none of which are reliable, they said.

“I agree we need to have technology, but only to a point where you are not dropping service for people that are dependent on it,” said Kelli Mathia, immediate past president of the Odd Fellows Recreation Club in Guerneville, down the Russian River from Hacienda.

If AT&T is really trying to upgrade services, why must they pull out copper lines first? Halliday wondered. 

But McKinnor said allowing AT&T to  preemptively pull the lines is only fair.

“I believe in free enterprise,” she told CalMatters. “I can’t mandate a business to spend billions of dollars doing infrastructure and say, ‘Oh, maybe we will give you (the relief) at the end.’”

AT&T’s real goal is to boost its bottom line, said Regina Costa, a Hacienda resident and telecom policy director for The Utility Reform Network, which led opposition to the bill.

“What they really want is to get rid of customers that they do not think are profitable,” she said.

In a shareholder meeting last year, AT&T CEO John Stankey said getting customers off of copper lines allowed the company to “turn down” that service in “low utilization” and “low profitable” territories. “I can turn out the lights, walk away, take cost out of business,” he said.

AT&T’s web of connections

AT&T is already a political juggernaut in Sacramento.

Between 2015 and 2024, AT&T made nearly $3 million in campaign contributions to state lawmakers, according to an analysis of CalMatters’ Digital Democracy database. This year, it contributed nearly $300,000 to lawmakers’ campaign accounts as they considered its sponsored legislation, data from the California secretary of state’s office shows. 

AT&T also reported giving five California lawmakers and two of their staffers $300 tickets to Mexican singer Ana Gabriel’s Sacramento concert on the day the bill died in the Senate Appropriations Committee. The five, all Democrats, were Sen. Susan Rubio of West Covina and Assemblymembers Mark Gonzalez, of Los Angeles; José Solache, of Lakewood; Juan Carrillo, of Palmdale; and Blanca Rubio, of West Covina. All voted for AB 470 this year, with Assemblymember Rubio voting for early iterations of the bill but not casting a floor vote. 

Spokespeople for all five lawmakers told CalMatters that AT&T’s gifts did not sway their decision and that they supported the bill on merit. 

The company spent another $4 million lobbying state lawmakers and Gov. Gavin Newsom’s administration about the bill this year, including $2 million spent between April and June, making it the company’s most expensive lobbying quarter in California in 20 years. It spent an additional $354,000 lobbying the utilities commission to influence the state’s carrier of last resort rules and policies around telephone companies’ service quality standards.

AT&T is so powerful in Sacramento, Grosse said, that some legislative aides told him in the past he would not win in a fight against the company. 

“The (party’s) rural caucus can go ahead and they can talk to legislators, but AT&T is spending so much money on elections you are not going to prevail,” he recalled being told. 

On its face, AB 470 had widespread support this year from Californians for a Connected Future, a recently formed coalition of more than 150 disability advocates, chambers of commerce, tribes, community service organizations, local officials and small businesses, including a construction company and a tennis shop. For months, dozens of those groups testified in public hearings and signed identical letters urging lawmakers to pass the bill, arguing it would incentivize modern technologies and ensure more reliable coverage. 

The coalition, which describes itself as “grassroots,” also states it is a “project of USTelecom.” Rhonda Johnson, AT&T’s executive vice president of federal regulatory relations, sits on the trade group’s board. USTelecom received $250,000 from AT&T to lobby on its behalf this year, and also spent between $85,200 and $106,000 running ads on Facebook supporting the bill in the coalition’s name, according to a CalMatters tally. 

It’s a prevalent practice commonly known as “astroturfing,” when corporations or trade groups enlist seemingly unaffiliated organizations for the appearance of grassroots support, said Jack Pitney, politics professor at Claremont McKenna College. 

“If you don’t read the fine print, you’ll assume that … there are a lot of organizations that sincerely support this legislation.”

While the coalition often bragged about the scale and diversity of its membership, more than 80% of member organizations have ties to AT&T, CalMatters found. 

Some of those groups have AT&T’s top leaders serving on their board of directors. That includes AT&T president Susan Santana, who sits on the board of the California Chamber of Commerce. Ben Golombek, the chamber’s chief of staff for policy, most recently served as the west region vice president for public affairs for AT&T. Other AT&T executives, mostly directors of external affairs, double as board members of various local chambers, business groups, foundations and voting rights groups. 

AT&T also pays to be a member of many local chambers of commerce, many of whom support the bill. Of the 28 chambers in support, AT&T is listed as a corporate member of 26 of them. 

Dozens of coalition members list AT&T as a key funder. The California Asian Pacific Chamber of Commerce calls AT&T an “invaluable” partner. Groups such as the Concerned Black Men of Los Angeles, which provides mentorship to Black local residents, list the company as a sponsor. 

Others, including tribes, youth service groups and senior advocates, have partnered with the company in its $5 billion effort to “bridge the digital divide” nationwide, distributing free laptops donated by AT&T,  hosting “connected learning centers” the company set up across the state to offer free digital access or receiving grants from AT&T to address digital inequity. 

The telecom giant has also sponsored events for some coalition members, from golf tournaments for the San Gabriel Valley Conservation Corps to the 70th anniversary gala of Society for the Blind. 

The financial support can make it hard not to align with AT&T, Pitney said.

“If AT&T has supported you in a material way, you want to make sure that support continues,” he said. “You are likely to look favorably on requests from that organization.”

CalMatters reached out to all organizations and people named in this story for comment. Most did not respond. California Chamber of Commerce spokesperson John Myers said it supported the bill because it made “economic sense.” Lauren Oto, a spokesperson for the California Asian Pacific Chamber of Commerce, said the group supported the AT&T-backed bill because “it represents a key opportunity for our members to see that technology is being used to improve public safety and expand access to communication.”

Norma Quiñones, executive director of the San Gabriel Valley nonprofit, told CalMatters AT&T’s sponsorship had nothing to do with the group’s support for the legislation. But the nonprofit offers job training to youths, she said, and AT&T is a prospective employer. While acknowledging not knowing much about the bill, she said it would help close the digital divide and expand high-speed internet access to underserved communities like the ones she serves.

“I wanted to build the relationship with AT&T and support their efforts,” she said. “It ultimately ties into our workforce development and our digital equity goals for our young people.”

The sway AT&T has worries residents like Grosse. 

“One of the largest corporations in the world spent (millions of) dollars lobbying on this thing,” he said. “Do you really think it’s in the public’s interest?”

Regulatory change on the horizon?

If potential legislation doesn’t beat them to it, California utility regulators are expected to decide the future of California’s carrier of last resort obligations over the coming months. 

The California Public Utilities Commission is currently undertaking a rulemaking process that seeks to answer questions including who should be providing last resort service, what would count as sufficient coverage and under what circumstances companies could stop doing so.

USTelecom and AT&T have advocated for changing the requirement so AT&T can stop providing this service in all but “populated areas,” and eventually leave those as well. 

“Customers will gain, not lose,” AT&T said in a September 2024 filing.

The Sacramento City Council officially designated the former Land Park Lanes bowling alley as a historic landmark this week. The change now allows the city to oversee any future renovations or demolition plans at the currently closed alley on Freeport Boulevard.

Built in the 1960s, the bowling alley shut down after a fire in February 2024. The outside may look fine, but the fire damage caused extensive water damage inside the building. A month after the fire, the owners, Bowlero Corporation, announced that the alley would not reopen, ending what many say was the city’s last operational bowling alley.

Councilmember Caity Maple represents District 5. She says the building holds personal meaning for her.

“It was actually the last operating bowling alley in the City of Sacramento,” Maple said. “And so just hugely impactful, people from all over the city would go and enjoy it. And actually for me personally, I hosted my election night party there in 2022 when I found out that I was elected to the city council.”

The outside of Land Park Lanes on July 23, 2025. The bowling alley closed after a fire in 2024 but was recently designated a historic landmark by the Sacramento City Council.

The council’s unanimous vote on Tuesday means the property at 5850 Freeport Blvd. will be added to the Sacramento Register of Historic and Cultural Resources. While the designation doesn’t guarantee the site will remain a bowling alley, it does give the city power to review and potentially block future modifications that would significantly change or destroy the structure.

For many Sacramento residents, the alley represented more than just a place to bowl; it was a rare community space for marginalized communities.

Roy Arimoto, a longtime member of the Sacramento Nisei Bowling Association, spoke in support during the city council public comment.

“There was a lot of hatred towards the Japanese Americans at that time, after World War II. My parents were interned,” he said. “But the Nisei Bowling League was one place where they could get together and share some fellowship.”

The Sacramento Nisei Bowling Association was founded over 50 years ago and hosted leagues, tournaments, and social events at Land Park Lanes for decades. It served as a social club for Japanese Americans in the region, especially in the years following World War II.In recent years, the alley has become a gathering place for LGBTQ+ leagues and casual bowlers across the city.

During the council meeting, Maple emphasized the importance of recognizing sites like Land Park Lanes, which hold cultural value for communities that have been historically marginalized. 

“It was a space that people really connected with, especially the surrounding community. When it burned down, it was devastating for the neighborhood,” Maple said. 

City officials at the meeting stated that the alley “retains a high degree of historic integrity.”

So far, there has been no word from Bowlero Corporation on whether the space will reopen or be repurposed.

This story was originally published by CalMatters. Sign up for their newsletters.

A substantial tax hike for California’s faltering legal cannabis market is set to take effect today, despite an aggressive industry campaign to suspend the increase that won the support of Gov. Gavin Newsom and other political leaders.

The excise tax for weed is 19% as of July 1, up from 15% — the result of a political deal three years ago that was intended to buy more time for the legal market to stabilize but which cannabis business operators now warn could chase away customers and push them over the edge.

“I’ve never experienced collective malaise like this,” said Genine Coleman, founder of the Origins Council, which represents small farmers in the historic Northern California growing region known as the Emerald Triangle. “People are so concerned with their survival and so deflated. It’s a dangerous space.”

An excise tax is a levy imposed on a good by the state before sales taxes are applied. While a push to freeze the cannabis excise tax through the state budget failed last month, a bill that would lower the rate back to 15% for the next six years is still moving through the Legislature. Newsom has pledged to sign a proposal halting the tax increase if it reaches his desk.

“I’m intimately familiar with the conversations around that and have great confidence that we’ll achieve our stated goals,” Newsom said during a press conference Monday.

Cannabis growers, dispensary owners and consumer advocates rallied for months at the state Capitol to avert the tax increase, which they argue could deal a fatal blow to businesses already operating with slim margins.

The price of weed has plummeted since voters legalized recreational cannabis through Proposition 64 in 2016, the result of a rush to overproduction even as most cities and counties in the state remain closed off to retail sales. Meanwhile, California is struggling to bring its market out of the shadows; the state Department of Cannabis Control estimates that legal sales still comprise less than 40% of weed consumption in California, which the industry attributes to state and local excise and sales taxes that can increase prices for consumers by a third.

Taxable cannabis sales in California dropped to $1.09 billion for the first quarter of 2025, down 30% from their peak in early 2021 and the lowest quarterly sales in five years.

Tax was intended to offset cannabis harms

It’s a crisis for the industry — communities that traditionally relied on cannabis production have collapsed economically — but also a problem for the state’s finances. Tax revenues from weed sales provide guaranteed funding for child care slots, environmental cleanup, substance abuse education and impaired driving prevention efforts as California faces a growing budget deficit.

“This was a poor time to say, ‘let’s starve the state even more,’” said Tom Wheeler, the executive director of the Humboldt County-based Environmental Protection Information Center, which joined a coalition of child care, environmental and tribal advocacy groups to lobby against a tax freeze.

He said it was important to uphold the promise of Proposition 64, which includes using cannabis tax revenue for programs that offset the harms caused by the cannabis industry, and expressed skepticism that the tax increase would hurt sales.

“I think the average consumer would not notice that,” Wheeler said. “At what point do we stop cutting taxes to benefit the industry?”

The 2022 agreement offered relief to growers by eliminating a cultivation tax, but it allowed state regulators, after a three-year pause, to raise the excise tax to make up for the lost revenue.

During budget negotiations last month, Newsom — who also wants to begin using cannabis tax revenue for enforcement against illegal cultivation — and Assembly Speaker Robert Rivas, a Democrat from Salinas, supported extending the pause on the excise tax. They could not reach a compromise with Senate President Pro Tem Mike McGuire, a Healdsburg Democrat who notably represents the Emerald Triangle.

In a statement, McGuire said “taxes on California’s overregulated cannabis industry have been a train wreck for years,” but he raised concerns about the fiscal implications of freezing the tax. State analysts estimate that increasing it to 19% could yield about $180 million per year for the state.

“It’s important to acknowledge that any freeze will create a budget shortfall which would impact critical community programs funded by cannabis tax dollars,” he said.

California could ‘forfeit a huge opportunity’

Industry representatives warn that further raising taxes will push price-sensitive customers back into the illicit market, hurting businesses teetering on the edge and actually lowering cannabis tax revenue in the long run.

“The math isn’t there,” said Amy O’Gorman Jenkins, executive director and lobbyist for the California Cannabis Operators Association. “We have no objections to how cannabis tax revenues are being spent. All we’re maintaining is that you can’t squeeze blood from a stone.”

They haven’t given up, though repealing the tax increase now that it’s taken effect will be even more challenging.

Assembly Bill 564, which would set the cannabis excise tax at 15% through the end of June 2031, passed the Assembly unanimously in May and now awaits consideration in the Senate.

Assemblymember Matt Haney, the San Francisco Democrat who introduced the measure, said he will keep fighting to get it to the governor. But he was furious that the Senate allowed the tax hike to take effect, which he said sent a message to legal cannabis operators that there is no incentive to follow the rules.  

“This tax could kill this industry and there’s still not enough being done,” he said. “California is going to forfeit what should have been a huge opportunity for our state.”

After more than a century of operations, a Sacramento-based almond cooperative will close its historic Midtown manufacturing plant.

Blue Diamond Growers announced Friday it will transfer most of its operations to other facilities in Turlock and Salida. The move will occur in phases over the next 18-24 months starting with 10% of plant employees being let go later this year, according to Blue Diamond President and CEO Kai Bockmann.

Bockmann said in a release, “The challenges of running a plant from these historical buildings has become too costly and inefficient,” and that he had spoken to plant members Friday morning.

CapRadio visited the facility to speak with workers, but they declined to comment out of fear for their jobs. 

Local leaders respond 

Councilmember Phil Pluckebaum acknowledged that the closure will lead to many Sacramentans losing their jobs. The company says an estimated 600 employees will be affected by the closure.

“We haven’t had any analysis yet in terms of what that would mean for specific local impacts, but it’s always a bad day when anyone loses a job,” he said. “Blue Diamond is a place with really good longevity. They have generations of people that have worked there. It’s always heartbreaking when you aren’t able to continue those opportunities for folks.” 

He applauded Blue Diamond for mitigating those impacts on their employees by giving them months to prepare. 

In their announcement, the company said it will provide incentives for workers to stay during the transition, along with severance and outplacement services and the potential chance to work in other locations.

Regarding its historic Midtown plant, Bockmann says the building will be put up for sale. He said the site offers “many opportunities for prospective investors interested in developments and improvements.”

Pluckebaum expressed similar optimism about the property’s future, particularly looking at potential economic development and housing opportunities. 

“You can imagine an infinite amount of interesting and creative, attractive uses, including other potential employment opportunities,” he said. “I think this is a rare opportunity to be able to be a part of the revisioning of what’s happening here.” 

In a statement, Mayor Kevin McCarty thanked Blue Diamond for “115 years of partnership” and called the company “an iconic symbol of Sacramento’s history in the agricultural manufacturing industry.”

Cadena Farm

However, not everyone is happy about the move. Almond growers around the Sacramento region benefited from having a large buyer like Blue Diamond near them.

That includes Stephen Gordon, owner of Cadena Farm in Esparto. Cadena Farm has been in Gordon’s family for over 50 years. His grandfather opened the farm in 1971 and they’ve been selling almonds to Blue Diamond for three generations, so he wasn’t expecting the closure announcement. 

“It’s going to be something that we’re going to have to wait and see,” he said. “The market’s so volatile right now.”

Gordon is anticipating almond growers in the Capay Valley, including him, will be impacted largely by increased distribution costs. 

“The connection with the buyer and the farmer is going to change dramatically, especially with it going down to the Central Valley,” he said. “Suddenly, the backdrop has changed, the landscape has changed around us and that seems to be happening every day no matter what we do.”

Almonds are a top product of California’s agricultural industry. According to the Almond Board of California, the nut is the state’s #1 crop by acreage and its top agricultural export, valued at almost $5 billion. A forecast released by the U.S  Department of Agriculture in April estimated that California’s estimated 2025 crop harvest will reach 2.8 billion pounds. 

The organization says around 7,600 farms around the state grow almonds,  90% of which are family-owned like Cadena Farm. 

Despite Blue Diamond’s impending departure, Gordon does not expect much to change in his region,  known for its rich agricultural history and love for almonds. The Capay Valley holds its annual Almond Festival every February, which Gordon has helped organize for the last several years. 

“It’s part of our heritage, part of our DNA,” he said. “At the end of the day, we’re still going to be an ag town. We’re still going to have the best farms on the West Coast. We’re still going to be pushing out the best produce every day, every season.”

Economic development, housing

Barry Broome, president and CEO of the Greater Sacramento Economic Council, said this news would have been devastating 10 years ago, if it weren’t for the city’s continued economic growth. 

“Sacramento is in the top 10 in the United States now in growth, number seven in job performance,” he said. “These things don’t end up being losses when you’re working hard and growing your community the right way. I’m convinced this will be a success story for Sacramento. 

Broome said the move to the Central Valley is largely because of the increased wages necessary to live in Sacramento, noting that many Blue Diamond workers were making around $25 an hour. 

“If you’re in the Central Valley, you can find rents for $25 an hour,” he said. “In Sacramento, you got to make over $70,000 a year for you to comfortably manage living here.” 

He’s excited about prospective developments that will bring higher-paying jobs, particularly for young people.

“We want people to make $94,000 in our town and we’re not hospitable to $25 an hour anymore,” he said. 

Broome also said any real estate development project they work with would need to present some contribution towards housing in Sacramento. 

“I think employers will be able to go to this site and their residents will be able to live there, and those residents will also be able to send their kids to a neighborhood school,” he said. “The short-term impact, as we understand it, should be graceful, and the long-term impact should be better for everyone.” 

Blue Diamond confirmed with the economic council that they will keep their headquarters in Sacramento.

Blue Diamond’s Sacramento legacy

The California Almond Growers Exchange was formed in 1910, and was later renamed Blue Diamond Growers in 1980. (Courtesy of Blue Diamond Growers.)

Blue Diamond’s history in Sacramento dates back to the beginning of the 20th century. The company was originally founded as the California Almond Growers Exchange in 1910, the first successful grower-owned cooperative for marketing state-grown almonds.

According to the company website the Exchange built a receiving and packaging plant in Sacramento in 1914, and adopted the blue diamond symbol one year later. The cooperative officially changed its name to Blue Diamond Growers in 1980.

The company opened its Turlock manufacturing plant in 2013, which it called the largest single almond investment since the cooperative was organized in 1910. Blue Diamond later opened its Salida facility in 2019.

Blue Diamond Growers says it represents nearly 3,000 growers around the state, and employs around 1,400 people across all its plants and other locations.

Keyshawn Davis contributed reporting to this story.

This story is part of special coverage the SacrameKnow newsletter team is doing on Vietnam. April 30 marked 50 years since the end of the Vietnam War. Sign up to get updates about what’s happening in the region in your inbox every Tuesday and Thursday.

The sweet aroma of fresh herbs and savory smell of fish sauce are two of many things that distinguish Little Saigon from other parts of town.

The two-mile stretch of Stockton Boulevard in South Sacramento between Fruitridge and Florin roads is filled with restaurants, bakeries and markets each bringing their own take on Vietnamese cuisine to Sacramento.

According to a Pew Research study, the Sacramento metropolitan area had the 10th largest Vietnamese population in the country in 2019 with roughly 42,000 people.

That's something that many, including Kim Tran, owner of Saigon Oi, take pride in. 

Saigon Oi

Saigon Oi Friday, May 9, 2025, at 6835 Stockton Blvd in Sacramento's Little Saigon District.(Gerardo Zavala/CapRadio)

Tran immigrated to the United States from Vietnam in 2008 when she was 18. The now 37-year-old said she has lived in Sacramento since then and doesn't plan on leaving any time soon.

“I never left, my family is here,” she said. “Sacramento is like my hometown now. I love it.” 

Tran majored in childhood development and said she never thought she'd be a business owner. The COVID-19 pandemic and having a child changed that. 

“I decided to open the restaurant because of not only a reliable income but also an aspiration to share Vietnamese cuisine with people around the world, inspired by my beloved mother — a woman who is not only an excellent cook but also pours her heart into every dish she makes,” she added.  

She decided to serve authentic Vietnamese food instead of creating fusion dishes that she said cater to Americans.

“When I first came to the United States, all the Vietnamese restaurants served more fusion with American food, so you can't even taste that real Vietnamese flavor,” she recounted.

There are roughly 10 dishes on her menu, all of which she said are good choices for first time visitors.

“You never go wrong with any plate in the menu,” she said. 

However, she noted that the first and second — bánh mì chào and bánh canh cua — are the most popular. 

Tran decided to start her business in Little Saigon because it reminds her of her home country and being a child. 

“We want to be here surrounded by not only Vietnamese people, but also other ethnicities,” she added. 

And her entrepreneurial goals are not done. She hopes to open a second business, a bread bakery focused on making bánh mì, a Vietnamese sandwich typically filled with pickled vegetables, fresh herbs and marinated pork. 

“It will be around the area too,” she assured. “I love Sacramento, that’s why I want to be based here. I will stay here, maybe for the rest of my life.” 

When Tran wants to get a taste of Vietnam that doesn't come from her own kitchen, she said Seafood House Quan Oc is her go-to because it reminds her of street food in Vietnam, and because it's open late.

“In Vietnam, they close very late at night,” she explained. “Everybody is hanging out in the street and enjoying the night, not closing too early like here. I love to hang out there because they're open late and I can hang out with my friends.” 

B?n Thành Market 

B?n Thành Market Friday, May 9, 2025, at 6821 Stockton Blvd in Sacramento.(Gerardo Zavala/CapRadio)

If you prefer to prepare your food and want to try creating  authentic Vietnamese dishes, or just want to get some snacks, B?n Thành Market in Little Saigon is a good place to start. 

Huy Pham owns the market. He’s been in the United States for 10 years and opened the shop two years ago.

Pham said his market specializes in selling organic free range chicken and fish from Vietnam. 

“We focus on the product quality more than the price,” he said. “You can go to another store and the pricing can be very low, [but] we make sure our products are [high quality].”

Pham said he visits manufacturers and tries products for himself before deciding to sell them at his store. 

He encouraged anyone who’s never visited Little Saigon to stop by noting that on top of having some of the best Vietnamese food in town, it also has Hmong and Chinese businesses, showing how diverse the region's Asian American population is. 

“We have a lot of stores that've been here for 20 or 30 years, and they've been here for a long time for a reason,” he added. “We have things to fit everyone's taste.” 

Hanoi 36 Streets

Hanoi 36 Streets Friday, May 9, 2025, at 3262 J St. in East Sacramento.(Gerardo Zavala/CapRadio)

Little Saigon might be the hub for Vietnamese culture and cuisine, but it's not the only place in town serving authentic dishes. 

A short drive from the South Sacramento neighborhood nuzzled between a popular Mexican Restaurant and a dry cleaner in East Sacramento is Hanoi 36 Streets.

The restaurant, similar to others in the area, serves ph?, bánh mì and other popular Vietnamese dishes, but with a twist. 

Kien Do, brother of the owner, explained that he and his family help operate the business. They specialize in Northern Vietnamese cuisine, which he noted is similar to Southern Vietnamese cuisine but has a different flavor. 

“I think one of the biggest differences between the north and the south is the seasoning and the presentation,” he explained. “With the north, we focus more on the saltiness of the dish while the south, they are focused more on the sweet side.” 

The 25-year-old used vermicelli, a popular rice noodle dish, as an example. Although the ingredients are practically identical, he said the way they present and mix the ingredients creates a unique flavor profile difficult to find anywhere else in Sacramento. 

Do said that's because Northern Vietnamese cuisine is largely ignored in popular Vietnamese restaurants not just in Sacramento, but around the country. 

“So we said, ‘You know what? Let's take a bold step and bring what we know to the world,’” he added. “And now we have Hanoi 36 Streets.” 

Do said he hopes the restaurant helps popularize Northern Vietnamese cuisine, noting that now popular dishes like ph? and bánh mì weren't always so well known. 

“When the time and the moment is right, it just expands out, and I hope it's going to be the same with North Vietnamese food,” he said. 

For himself, Do said food is a “comforting way to connect” with people.

“Since I myself have problems with trying to speak out loud and voice my opinions, I use food to communicate with people,” he said. “I hope that our people could show the love and dedication, and hopefully it would reach all the customers who dine in and choose to stop by our restaurant.” 

Prior to the opening of Hanoi 36 Streets, Do said he frequented two local Vietnamese restaurants: Ph? City along Stockton Boulevard and  SitLo Saigon along Laguna Boulevard in Elk Grove. 

“Every time I'm happy, Ph? city. Sad? Ph? City,” he said. “Those two places, highly recommended.”

Mother's Day is fast approaching, which means time is running out to find the perfect gift.

Fortunately, Sacramento has a variety of local shops offering thoughtful gifts from vibrant floral arrangements and artisan cookware to authentic Latin American chocolate. 

Here are three local businesses the CapRadio newsroom recommends checking out this holiday. 

Poppy and Pot

The inside of Poppy and Pot Tuesday, May 6, 2025, in Sacramento.(Gerardo Zavala/CapRadio)

Poppy and Pot is a Black and queer-owned Franklin Boulevard shop specializing in flowers and ceramics. Wife and husband Da’Reen and Kevin Reichenberg co-own the business.

“It’s a common misconception that we’re a dispensary, and we’re not,” Da’Reen said. “I’m doing the flower side, so I’m the poppy, and he does pottery, so he’s the pot side.”

Da’Reen said it’s not common to see Black women, particularly Black queer women, in the floral industry. 

“We get great business because of who we are and being loud and proud about who we are, and it’s even more important in today’s climate to support Black and queer-owned businesses,” she said. 

On top of selling flowers, pottery, chocolates and seeds in their Curtis Park shop, she explained that they also offer pottery classes that have become increasingly popular. 

“We thought, coming in here, that people would want flower arranging classes,” she said. “People don’t care about flowers. When they walk in, they’re like, ‘Wait, you do pottery classes?’ It’s the perfect gift.”

According to Da’Reen, Throwing with Kev classes are sold out through June, but gift cards are available for future classes. 

Her business delivers on Mother’s Day and delivery is free for anyone living in the Curtis Park or East Sacramento area. However, she warned people not to wait too long before ordering.

“Try not to wait too last minute because a lot of shops, us included, will cut deliveries off at a certain time,” she said. “But you can always walk in and grab something wrapped on Mother’s Day too, so we do still have the last-minute gifts.” 

The Kitchen Table

Judith Ragland show aprons Tuesday, May 6, 2025, at The Kitchen Table at 810 Alhambra Blvd in Sacramento.(Gerardo Zavala/CapRadio)

Tucked away on the corner of Alhambra Boulevard and H Street in East Sacramento, The Kitchen Table has something for everyone, whether they like to cook or not. 

Judith Ragland has been a sales associate for the business since 2019. She said they’re a “kitchen store first,” so they have everything from cookbooks and bread baking tools to local olive oils, balsamics and honeys. 

“We always laugh that we have the tool you never knew you needed until you saw it,” she said. 

As Ragland walked around the store, she pointed out unique items and gadgets including Mason and Cash mixing bowls and servers, which she noted are used in The Great British Bake Off, aprons and a Snoop Dogg Cookbook.

“It’s actually a pretty good cookbook,” she said. 

For moms who don’t like cooking, Ragland recommended self-care items they sell, like lavender eye pillows.

“[These] are crazy popular this time of year,” she said. “You microwave them, get them hot, come home from a stressful day, throw that on, grab a glass of wine [and] you’re good.” 

Although the business has been around for several years, it recently moved to its current location and has a second space in Land Park, where Ragland noted workshops and classes are held. 

“If your mom's interested in doing some kind of an experience with you as a gift, then we have a lot of workshops if you look at our class website,” she said. 

The business will be closed on Mother’s Day, so Ragland recommended people stop by soon to get the perfect gift for mom.

“We’re a pretty small staff and most of us are moms,” she added. “My daughter actually works with us, so it’s nice that she’ll be home and we can go to brunch.” 

Café Xocolatl

Chocolate bars line the walls of Café Xocolatl Monday, Sept. 23, 2024, at 1607 10th St. in Downtown Sacramento.(Gerardo Zavala/CapRadio)

The walls of Café Xocolatl are filled with hundreds of what owner Ariel Wolansky calls “exotic and hard-to-find” chocolate bars from dozens of brands. 

“It’s much appreciated if you do want to come in to do some Mother’s Day shopping,” Wolansky said. “It really helps a lot of small businesses in the area and we’ll make sure to spoil your mom on that day if you do bring her.” 

The cafe will offer several specials during the annual holiday, including specialty truffles, most of which are from local vendors, and a Mayan Rose candy bar from Wolansky’s business, Choquiero Chocolate. 

“If you do bring your mom, I recommend the rose goddess chocolate drink or xocolatada, our most popular drink,” he said. 

When asked what he’ll be getting his mom, he said he already gets her something from his store every week.

“But right now we have a really cool chocolate that is all the way from Finland by a brand called Goodio called cherry pie, and we’re pretty excited to carry it,” he noted. “I would like to get her that because I haven’t given my mom that yet.” 

The cafe also offers ceremonial cacao tastings during regular business hours, which Wolansky noted uses cacao often made by small communities in Latin America. 

“If it is a little too bitter, we like to sweeten it with a little honey or maple, and perhaps a splash of our homemade cashew milk,” he said. “We can adapt it to meet everyone’s taste.” 

The cafe will be open from 9 a.m. to 4 p.m. on Mother’s Day, but Wolansky encouraged people to visit soon because items might sell out.

An escalating trade war between the United States and Canada has created significant economic uncertainty.

Since taking office two months ago, President Donald Trump has announced, paused, implemented, and rescinded tariffs on various Canadian products, ranging from energy to aluminum to automobiles.

In response Canada has imposed retaliatory tariffs and boycotts on billions of dollars worth of American goods, including wines and other alcohol products. These actions are being felt in California, and threaten to upset decades of work spent gaining access to this market.

Bill Easton is the President, Winemaker and Winegrower at Terre Rouge and Easton Wines in Amador County. He spoke recently with Insight Host Vicki Gonzalez.

Easton said he spent 30 years developing business relationships across multiple Canadian provinces. The Canadian wine trade makes up between 10-12% of Terre Rouge and Easton’s gross business, which at times increased to around 20% pre-COVID. 

“Canada is significant for my business, not only from a monetary standpoint but from an appreciation standpoint,” Easton said.

However, over the last two months, Easton said he has seen a noticeable decrease in business from the U.S.’s northern neighbor. “I have had purchase orders canceled,” Easton said. 

“In both Ontario and Quebec… all American product has been removed from shelves, even if they paid for it. It's beyond a boycott. They’re unavailable.”

Easton provided several emails to CapRadio showing how some of these removals rolled out.

On Feb. 3 the government of Quebec announced that all U.S. alcoholic products would be removed from store shelves and the Société des alcools du Québec (SAQ) website, and supplies to grocery stores, bars and restaurants would be stopped. Orders, private imports and promotional commitments for U.S. products would also be cancelled.

These were stopped two days later after the U.S. granted a reprieve on tariffs, but on March 4 Canadian officials reintroduced the cancellations and removals.

“We will intentionally leave the shelves empty for a while to show our support for the measures in response to the tariffs imposed by the United States,” SAQ officials wrote in a release, saying U.S. products would be largely replaced by Canadian ones.

Easton said he has received apologies and messages from some of his Canadian agents amid the ongoing trade war, but said there is little anyone can do.

“I have a lot of friends there,  I've developed relationships with people that were wine buyers and sommeliers,” he explained. “It's just like somebody's pulled the carpet out from under us.”

Looking at long-term impacts, Easton said trust is an important factor in international trade, but noted the uncertainty the tariff fight is creating. He voiced concerns about other potential tariffs, as his company sells to various international buyers.

Easton specifically pointed to a threat Trump made in March to place a 200% tariff on imported European wines. He said such a measure, coupled with European retaliation, could damage his operations and potentially crush some of his partners.

“A specialty producer like me… works with distributors around the United States,” Easton said, adding that these individual distributors sell portfolios of wines, including both international and California varieties.

“They sell my wine, they sell Napa Chardonnay, they sell Sonoma Pinot Noir… that's how they structured the business,” he said.  “If you pull some bricks out of that structure, that business is going to collapse.”

Wine tariffs impact local canning business

The local impacts of international tariffs on wine extend beyond just grapes and drinks.

The Can Van is a mobile beer and wine packaging company based in Sacramento that specializes in canning. The company started in 2011 by offering canning to local breweries, and in 2015, it added wine canning.

The company’s co-founder and CEO Jenn Coyle said since Canada stopped purchasing California wine, her business felt the impact immediately. She said if the tariffs remain in place and Canada doesn’t buy California wine, her company will be unable to do its job, and no one will be paid.

“We have a client who makes a canned wine product specifically for the British Columbia liquor store,” Coyle said. “We were supposed to be canning it this week, actually, and a couple weeks ago, they said, ‘Well, they canceled this order, so we have to cancel this project.’ So there's a lot of people who are impacted by these policies at all levels.”

The cans for the Rosé wine order have already been printed. The wine is in the tank. It was on their schedule ready to go, but Canada will not take the product. 

“We don’t get anything out of that,” Coyle said. “It's very disruptive to our schedule because we've booked the time, we've scheduled things. We've scheduled people, materials and all of that. So we try to move people around and do other projects, but it definitely has an impact.”

Decades of business relationships, trade at risk

Pete Downs is the President of Family Winemakers of California, an advocacy group for small and family-owned producers in the state - including Terre Rouge and Easton.

He said in an email the organization is still analyzing specific impacts of these tariffs and boycotts, “but just from our initial evaluation we know that it will not be positive.”

“We know that the shelf space that we have worked so hard to secure is in jeopardy and could be lost forever,” Downs wrote.

When tariffs were first announced in early February the California Wine Institute, an organization advocating for the state’s wineries and related businesses, called for a resolution. In a release President and CEO Robert Koch said over $1 billion worth of U.S. wines are sold in Canada annually.

“Wine is one of the U.S.’ most highly value-added agricultural exports, so any loss of access to the Canadian market will damage the entire U.S. wine sector,” Koch wrote.

“Our wineries have spent decades building market share and brand loyalty across Canada. These actions put all of this at risk.”

Rana Sarkar, Consul General of Canada in San Francisco spoke on CapRadio’s Insight last month about the trade war’s impact on the Canadian and Californian economies, including the wine market. “We’re the biggest buyer of California wine,” Sarkar said.

Recent data from the Canadian government shows California annually exports around $510 million worth of alcohol and other beverages to Canada. Sarkar said the boycotts and removal of American alcohol are part of a larger change in preferences among Canadians.

“You go into a Canadian grocery store now, you start to see products being marked as Canadian, American and Mexican,” Sarkar said. “People are choosing not to buy American products right now, and that’s fairly dramatic.”

Sarkar said Canada and the United States are allies and partners despite the trade war, but added that things need to “get serious.”

“If there are things that we need to address in the trading relationships… we should sit down in an orderly fashion and have those conversations,” he said.

By Levi Sumagaysay, CalMatters

California’s small businesses — employers to more than half the state’s workforce — are staring down what some owners, experts and advocates say could be immense negative consequences from President Donald Trump’s slew of executive orders. 

Trump’s embattled federal funding freeze and anti-diversity push have seeded uncertainty about the economy, jobs and spending on infrastructure and innovation. 

The freeze, imposed on Jan. 27, affected hundreds of billions of dollars for thousands of federal programs, including many aimed at small businesses. After states including California filed suit, a federal judge issued a temporary restraining order putting the freeze on hold. Since then there has been more legal wrangling, including a court order stating that Trump failed to comply with the initial ruling.

The administration has said funding for small business would not be paused, but owners and advocates are not sure if that will prove true, and say uncertainty about the freeze may already be doing damage.

Liz Perez, who owns a small general contracting firm in San Diego County, said news of the funding freeze gave some people in her Native American community “heart attacks.” She said some projects that were under construction had to be temporarily halted while those in charge tried to figure out what was going on.

“I’ve never seen tribal leaders — the most put-together leaders — so frazzled,” Perez said.

Perez and other small business owners, allies and experts worry that a freeze could mean fewer opportunities for entrepreneurs to start and grow businesses, which could lead to fewer jobs and less spending and investment for communities, industries and larger businesses.

Small businesses with fewer than 20 employees accounted for 29% of jobs in California, and businesses with 20 to 100 employees accounted for 30% of jobs in the state as of the end of 2022, according to an analysis of Bureau of Labor Statistics data by the Public Policy Institute of California.

California, the nation’s most populous state, is the biggest recipient of Small Business Administration loans, with $1.15 billion in loans approved for this year. Not all loans from the agency are federally funded, but they are guaranteed by the government. The loans funded by the agency, which could be most at risk from the freeze, include disaster loans and microloans. 

Other federal funds that help small businesses and were on the list of programs to be frozen include the $25 million for the State Small Business Credit Initiative, which the Finance Department said is in the state’s 2025-2026 fiscal year budget. Community development financial institutions, which provide banking services to small businesses, are also facing a “real and immediate threat” to their funding that includes possible cancellation of contracts, the CDFI Coalition said in an email to its members this week that was seen by CalMatters.

Simon Brown, spokesperson for national advocacy group Small Business Majority, said small business owners, who “struggle to access capital from all institutions at all levels,” count on the Small Business Administration as a key source of help. Although he is unclear about whether funding from the agency will be affected, he is concerned. “If SBA funding was choked off in some way, it would be a major blow to the entire ecosystem,” Brown said. 

Representatives from the Small Business Administration did not return multiple requests for comment, and neither did the White House.

Alex Bloom, economic development manager for Central Sierra Economic Development District as well as Mother Lode Job Training — which handles training funded by the federal Workforce Innovation and Opportunity Act — said the effects of a federal funding freeze could be far-reaching.

“Overall there’s a level of uncertainty,” that could lead to a drop in investor confidence, he said. And “a funding freeze or delay could halt infrastructure projects, which would affect job creation and development that are critical to our region,” Bloom added.

Others say a freeze or pullback on funding will have an impact on equity — that it could hurt those who need the most help.

How federal aid and policies have boosted small business 

Perez said she served in the U.S. Navy for nine years, then “transitioned right into a recession.” At one point, she was pregnant and had nowhere to live. She began working in construction and eventually started a business.

“My business helped get me out of poverty,” said Perez, owner of GC Green, a general contracting and consulting firm that focuses on clean energy, and subsidiary Veterans Energy Services Company. 

Liz Perez, owner of GC Green, a general contracting and consulting firm that focuses on clean energy, walks around an electric vehicle charging station that was recently completed at a Sonic location in Vista on Jan. 31, 2025. The charging station waAriana Drehsler/CalMatters

On the list of programs the Trump administration is examining include funds for small business development centers, development loans and technical assistance for small businesses. 

The budget office also said it wanted to root out “Marxist equity, transgenderism, and green new deal social engineering policies.”

California Attorney General Rob Bonta, who with other state attorneys general won a temporary restraining order against the freeze, said last week during a press conference that, if enacted, it would affect 34% of the state’s budget, which he called “a massive, irreplaceable chunk.”

As a woman, veteran and Native American, Perez said she has been helped by some DEI initiatives. But she said “starting my company didn’t mean I cut in line, or got in front of everybody. It means I got my foot in the door.” 

Perez also was able to secure a federal loan to help Native American-owned businesses during the pandemic, during President Joe Biden’s administration, which she said helped her expand her business.  

“You roll back these initiatives, what is that going to do to our economy, our supply chains, our workforce?” she asked.

The budget office followed up its original memo with another one that said “funds for small businesses, farmers, Pell grants, Head Start, rental assistance, and other similar programs will not be paused.” But there is evidence that at least one of the things on that list has not been spared: Some Head Start programs have had trouble accessing funding and at least one has been forced to shut down in Washington, according to media reports and the states’ lawsuit. 

At least one expert CalMatters spoke with said he thinks small business is “probably one of the last places the spigot will be turned off.” Robert Dekle, an economics professor at the University of Southern California, said “it would actually be suicidal for the Republican party to continue with” cutting off aid to small businesses because he said small business owners make up “a large part of Trump’s base.” (A poll after Trump won the election showed changes in optimism among small business owners differed along party lines.)

‘We’re going backwards’ 

But Catalina Amuedo-Dorante, an economics professor at UC Merced, said this administration has made its priorities clear. “We’re going backwards (in terms of) rights for different minority groups, groups that need more assistance in medical care, food, education,” she said. 

The professor added that “harming human capital” is a recipe for disaster. She called the possible rollback of funding to small business, medical research and other programs a threat to this generation and next.

Line cook Leticia Andrade, left, puts together a lunch order at Creative Ideas Catering, a small business, in San Francisco on June 11, 2024.Juliana Yamada/CalMatters

Another one of Trump’s executive orders — titled “Ending Illegal Discrimination And Restoring Merit-Based Opportunity” —  includes a directive to  the Office of Federal Contract Compliance Programs within the Department of Labor to stop “promoting diversity” and “allowing or encouraging Federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.”

The president’s anti-diversity push rides a wave of similar sentiment that has swept the country in recent years, including through lawsuits against affirmative action in government. Last year, a judge ruled that a small business lending program meant to help Black, Latino and other underrepresented entrepreneurs should be open to white people. 

In late January, the Small Business Administration reportedly decreased its goals for federal contract awards to small and disadvantaged businesses to 5%, apparently because of the Trump directive on DEI. Under Biden, the goal was 15%. 

What all this could mean, regardless of what happens with the funding freeze, is that some small businesses that might otherwise have been considered for federal government contracts may no longer get those chances. 

Perez, the small business owner, said DEI initiatives can help when it comes to landing general contracting work, but not always: “Just because these policies are in place, it doesn’t mean you’re going to get the job. It’s so difficult. It’s grinding all the time.”

Carolina Martinez, chief executive of CAMEO Network, a small business advocacy group, said procurement opportunities were already limited, and the Trump administration’s new policies will make things worse. “It seems clear they’re opening the door to discrimination and racism,” she said.

Randell Leach is CEO of Beneficial State Bank in Oakland, a community development financial institution, which serves low-income customers and small businesses that may not be able to get loans elsewhere. Leach said he is concerned about the intersecting effects of “the curtailment of funding and anti-DEI measures that could come together and impact women entrepreneurs and communities of color.”

Not only does that directly affect historically underrepresented small businesses but also, potentially, “a whole host of vendors and tech companies that support them,” he said.

The bottom line: “It’s important to be aware that discrimination in any form is not only bad for communities, but for the economy,” Martinez said.

A popular café inspired by Mexican culture, Con Azúcar Café, is now open in downtown Sacramento. Con Azúcar Café originated in San Jose and is known for its enormous conchas and gigantic coffee.

The cafe is located in the Downtown Commons shopping center on 7th and K streets; the new location had a soft opening this week that started on Monday Jan. 27, according to owner Alan Jimenez. 

Jimenez said so far the soft opening has been a success even though they didn’t post anything on their social media.

“We're really surprised with the turnaround,” Jimenez said. “People are coming from surrounding businesses to corporate professionals to state workers, and it's been a blessing to truly see everybody come together.”

The cafe will continue to be open ahead of their grand opening on Saturday, Feb. 8. Jimenez said the cafe grand opening will start at 7 a.m., include a ribbon cutting at 10 a.m and end at 10 p.m.

“We're having mariachi, DJ, photobooth pretty much all day," Jimenez said. We're excited to start off this new year, and new business off the right.”

Jimenez said everyone who has come into the cafe has been super receptive.

“One of the biggest things that they kind of [say to]me is like, ‘oh, we're super excited to have something local, something authentic, to replace such a big corporate brand like Starbucks,’”Jimenez said. “So it's good to hear that feedback. It's motivating.”

General Manager Arturo Arias speaks with a customer during the soft opening of Con Azùcar Café in downtown Sacramento Thursday, Jan. 30.Keyshawn Davis/CapRadio

For years, Beng Lee greeted his customers with delicious treats to start their day at Village Express Donut Shop in Tahoe Park. 

But this damp Thursday morning was different. Instead of grabbing a quick coffee and Cruller, community members grabbed cleaning supplies and paint to bring new life to their beloved local eatery – All in honor of Lee, who is recovering in the hospital.

The Village Express owner was hit in the head during a robbery on September 26, according to the Sacramento Police Department. 

As time went by, Lee developed complications after the altercation and was rushed to the hospital two weeks ago where he was diagnosed with a blood clot in his brain, according to Tahoe Park Neighborhood Association President Isaac Gonzalez.

When Gonzalez heard Lee was in the hospital, he organized a GoFundMe to help with medical expenses, rent, bills, and day-to-day operational costs to keep Village Express Donut running. As of Thursday, the fundraiser has reached $18,000. 

“That money will help offset any lost revenues,” Gonzalez said. “We're also using some of that money to replace some equipment that has been broken for a while, that Mr. Lee has been unable to afford.”

Gonzalez said in addition to the GoFundMe, volunteers will also paint the entire store, but before that, they must clean it to prepare for the paint. 

“So today, we're doing the prep job, tomorrow to paint it so that when Mr. Lee comes back from the rehab facility— he has not been to the store since he was hurt— when he's able to come back—nice, fresh new store, new equipment, an outpour of support from the community, just to let him know how much we love him, want to be there for him in his time of need.” 

Gonzalez said he was motivated to do a GoFundMe because he successfully organized a similar campaign for the donut shop after it was broken into and vandalized on Thanksgiving Day three years prior. The campaign raised $6,000, so he thought it would be a good idea to try it again.

Former Tahoe Park resident Alex Huth saw a post from Gonzalez about the cleanup on Facebook and decided to help clean. 

“I think that when someone experiences this kind of thing, a health problem or natural disaster or something unanticipated, I think that the neighborhood is kind of what's there for them more than anything,” Huth said. 

Gonzalez said the support is a testament to how much everybody loves Lee because he is “a nice and sweet man.”

According to Gonzalez, Lee has given away donuts for free in the past and also gave kids donut holes. He said the community is doing right by him because he has done right by the community for so long.

“If you don't have money, he makes sure no one goes hungry,” Gonzalez said. “The community really cares about him, but it's because he has cared about the community for so many years, and has done that 20 years here.” 

John Finch and his coworker Steve Hatch stopped by the donut shop on their way to their carpenter jobs to get a dozen donuts.

Finch said he has visited the donut shop almost every morning for the last 10 years. He said  Lee has been a great community member for years and that someone attacking him is ridiculous because he’s one of the “kindest individuals” he’s ever met.

“I've come in here and not had my wallet, and he would say, John, come back tomorrow,” Finch said. “He's just a great guy. He's great for our community, and he's a great guy to come see every morning. He's tough as nails, though. He's going to get through this. That's one thing about Mr. Lee. He will be back.” 

Hatch said he’s been going to the donut shop since childhood, and Lee is always in good spirits every morning. 

“He knows everybody's name, everybody in the neighborhood, all the kids come here on the weekends,” Hatch said. “It's just a huge part of the community, and a lot of that is just him and his personality, and getting everyone their donuts and coffee that they need in the morning, and basically brightening everyone's day that comes in here for sure.”

One of the Tahoe Park community members who came to help clean up the shop is Gail Patrice.

Patrice has lived in Tahoe Park for a year and a half, but she previously lived there for 12 years. She said she saw a post on Facebook about the cleanup day, so she brought hammers, screwdrivers, and pliers to help fix up the shop.

“I saw that Isaac wanted to scrub and do a nice fresh coat of paint,” Patrice said. “So I looked around in the things that I have, and brought a couple of nude paint brushes I hadn't used, and some spackling paste if we needed to mend a hole in a wall.” 

Gonzalez said a local contractor named William Caldwell is going to be donating all the labor for a paint job. Community members wanting to donate or who are looking for ways to help can message him on GoFundMe. 

Google on Wednesday unleashed another wave of artificial intelligence designed to tackle more of the work and thinking done by humans as it tries to stay on the technology's cutting edge while also trying to fend off regulatory threats to its empire.

The next generation of Google's AI is being packaged under the Gemini umbrella, which was unveiled a year ago. Google is framing its release of Gemini 2.0 as a springboard for AI agents built to interpret images shown through a smartphone, perform a variety of tedious chores, remember the conversations consumers have with people, help video game players plot strategy and even tackle the task of doing online searches.

In a blog post, Google CEO Sundar Pichai predicted the technology contained in Gemini 2.0 will “understand more about the world around you, think multiple steps ahead and take action on your behalf, with your supervision.” It's a similar goal being pursued by hard-charging rivals such as OpenAI, with its chatGPT technology, and industry powerhouse such as Microsoft with a variety of similar tools on its Windows software.

A lot of Google's latest AI technology will initially be confined to test groups and subscribers who pay $20 per month for Gemini Advanced, but some features will be made available through its search engine and mobile apps. Google is planning wider releases next year that will include the technology popping up in its smorgasbord of free products, including its Chrome browser, digital maps and YouTube.

Besides trying to outshine OpenAI and other ambitious startups, Google is also trying to stay a step ahead of Apple as that trendsetting company begins to blend AI into its latest iPhones and other devices. After releasing a software update enabling the first bundle of the iPhone's “Apple Intelligence” features that spruced up the device's Siri assistant, another batch of the AI technology came out with a free software update that was also released Wednesday.

Google is pushing forward with its latest AI advances even as the U.S. Justice Department is trying to break up the Mountain View, California, company to prevent further abusive practices by its dominant search engine, which was declared an illegal monopoly by a federal judge earlier this year as part of a landmark antitrust case.

Among other things, Gemini 2.0 is supposed to improve the AI overviews that Google began highlighting in its search results over its traditional listing of the most pertinent links to websites earlier this year in response to AI-powered “answer engines” such as Perplexity.

After the AI overviews initially produced some goofy suggestions, including putting glue on pizza, Google refined the technology to minimize such missteps. Now, company executives are promising things are going to get even better with Gemini 2.0, which Pichai said will be able to engage in more human-like reasoning while solving more advanced math problems and even churn out some computer code. The improvements to AI Overviews will initially only appear to a test audience before a wider release next year.

The technological upgrade is also supposed to infuse a still-experimental universal AI agent dubbed “Project Astra,” with even more smarts and versatility, enabling people to have more meaningful and helpful conversations with the technology. In a show of confidence, Google said it will expand the number of people testing Project Astra without providing any specifics of the group's size.

As part of Gemini 2.0, Google is also going to begin testing an extension to Chrome called “Project Mariner,” which can be turned on to do online searches and sift through the results so people don't won't have to bother.

If the U.S. Department of Justice gets its way, Google will be forced to sell or spin off Chrome as part of its punishment for deploying its search engine in ways that stifled competition and potential innovation. Google has ridiculed the Justice Department's proposal as “overly broad” and vowed to resist any attempt to break up the company during federal court hearings scheduled to begin in Washington D.C. next spring.

Even if those proceedings culminate in a court order mandating a breakup, Google could still appeal in a process that could take years to resolve while it continues its AI expansion.

“I can’t wait to see what this next era brings,” Pichai wrote in his blog post, signaling the company doesn't believe it will be deterred by regulators.

On the final day of their session, California lawmakers sent Gov. Gavin Newsom a bill banning employers from forcing workers to sit through anti-union meetings — the latest attempt by Democratic politicians to support union activity amid a revived labor movement. 

If Newsom signs Senate Bill 399, California would join nine other states that have recently passed laws prohibiting an employer from requiring workers to attend so-called captive audience meetings about their political or religious views. 

Minnesota Gov. Tim Walz, the Democratic vice presidential candidate, signed one such law last year, and has touted it on the campaign trail. 

The California bill can cover discussions of employers’ views on political candidates or legislation, but it’s largely aimed at one specific kind of required workplace meeting — when bosses discuss whether workers should unionize. 

California workers, following a nationwide trend, have increasingly sought unionization in recent years. Union elections have spiked in the last three years, with nearly 17,000 workers voting at more than 300 California workplaces in 2023. So far in 2024, more than 14,000 California workers have voted in a union election, according to a CalMatters analysis of National Labor Relations Board data.

The National Labor Relations Board has generally allowed “captive audience” meetings for decades — provided employers don’t threaten workers or withhold benefits for supporting a union. But the board’s general counsel under President Joe Biden has sought to crack down on them, arguing they are often used to intimidate employees.

Business groups say the bill would be much broader, and would infringe on employers’ free speech rights. State bans in Connecticut and Minnesota have been challenged in court. Wisconsin in 2009 was one of the first states to ban such meetings; when employers filed suit the following year, arguing it conflicted with federal law, the state backed down and agreed not to enforce it. 

The California Chamber of Commerce made SB 399 one of their most fiercely contested bills this year. In a legislative alert on Tuesday, the chamber said the bill would “effectively chill any discussions related to legislation, regulations, or other ‘political matters.’” 

In an August letter to lawmakers opposing the bill, business groups argued they already can’t coerce workers to vote for certain candidates or to vote against unionizing, and said because the bill could fine bosses for talking to employees about political views but not other matters, it’s a violation of the First Amendment. 

The bill includes exemptions for “political organizations” that employ people whose job duties require them to engage in political activity, but chamber policy advocate Ashley Hoffman said in the letter that it’s too vague. 

But supporters say the bill only targets intimidation in the workplace by penalizing employers who punish workers for refusing to attend a “captive audience” meeting. 

“If an employer wants to share [their] beliefs at the worksite, that’s fine, but no one should be coerced to listen,” Assemblymember Eloise Gómez Reyes, a San Bernardino Democrat, said on the Assembly floor Friday before voting for the bill.  

The bill’s passage last week was a win for unions amid a number of losses this year in the Legislature, especially compared to the 2023 session. 

And while the state in the past two years has increased wages for fast food workers and health care workers, and boosted worker benefits such as paid sick days, labor-backed demands to make it easier to unionize or go on strike have been a tougher sell. 

“If we just keep doing legislation that makes things better for workers, that's good, but it's not the same power that you're giving workers in the workplace when they're able to strike, when they're able to organize without intimidation,” Lorena Gonzalez, leader of the California Labor Federation, told CalMatters this week.

In 2022, Newsom was reluctant to sign a bill making it easier for farmworkers to form unions by giving them an option to signal their support without employers knowing who was voting. He only gave his approval after the United Farm Workers drummed up political pressure from fellow Democrats, including Biden. That law has now been challenged by growers in court. 

Last year, he vetoed a bill to allow striking workers to collect unemployment benefits, a proposal that Hollywood writers and actors said would have helped them through the “hot labor summer” of work stoppages. Unions attempted to revive the bill this year, and it passed the Senate but failed to get enough votes to clear an Assembly committee. 

The captive audience meetings bill also passed the Senate last year, and then eked out of the Assembly last week with just over the minimum 41 votes needed to pass (though a handful of Democrats added “yes” votes later). It won final approval in the Senate Saturday on a 31-9 vote. 

The chamber is urging Newsom to veto the bill. The governor has not taken a position, and has until the end of September to decide.  

Two other bills sent to Newsom last week seek to help laborers cut out of traditional worker protections. He has rejected versions of both before.

Newsom in 2022 vetoed an expansion of unemployment insurance to undocumented immigrants, saying that the bill didn’t identify how to pay for it. The unemployment bill passed this year would require the administration to figure that out, and then report the plan back to the Legislature. 

In the past three years, Newsom has twice vetoed an expansion of workplace safety regulations to include domestic workers, such as house cleaners, nannies and caretakers, citing concerns about subjecting thousands of private homes to possible workplace safety inspections. The bill passed this year exempts workers who are privately employed by a homeowner or who are sent to private homes by publicly funded programs — such as county programs that pay caretakers for the elderly and disabled. 

Instead, the bill that passed this year puts the onus on house cleaning and home care agencies to ensure their employees are safe.