News from California Department of Tax and Fee Administration (CDTFA)

Cannabis Tax Revenues Total $60.9 Million in First Quarter

On May 11 The California Department of Tax and Fee Administration (CDTFA) today released revenue numbers for cannabis sales in the first quarter of 2018. Tax revenue from the cannabis industry totaled $60.9 million since January 1, 2018, which includes state cultivation, excise and sales taxes. It does not include local tax revenue collected by cities or counties.

In November 2016, California voters approved Proposition 64, the Control, Regulate and Tax Adult Use of Marijuana Act. Beginning on January 1, 2018, two new cannabis taxes went into effect: a cultivation tax on all harvested cannabis that enters the commercial market and a 15 percent excise tax on the purchase of cannabis and cannabis products. In addition, cannabis and cannabis products are subject to state and local sales tax at the time of retail sale.

California’s excise tax on cannabis generated $32 million in revenue for the first quarter of calendar year 2018.  The cultivation tax generated $1.6 million, and the sales tax generated $27.3 million in revenue. Medicinal cannabis is exempt from sales tax if the purchaser holds a valid Medical Marijuana Identification card.

To learn more, visit the Tax Guide for Cannabis Businesses on the CDTFA website.

Important Notice: Legislation created the California Department of Tax and Fee Administration (CDTFA) to administer most of the taxes and fees previously collected by the Board of Equalization. Additional information concerning this recent change can be found at www.boe.ca.gov and at www.cdtfa.ca.gov. For more information on other taxes and fees in California, visit the California Tax Service Center.

Note: This news release may discuss complex tax laws and concepts. It may not address every situation, and is not considered written advice under Revenue and Taxation Code sections 6596 and 55045. Changes in law or regulations may have occurred since the time this news release was written. If there is a conflict between the text of this news release and the law, decisions will be based upon the law and not this news release. For specific help, please contact the CDTFA at 1-800-400-7115.