$60.9 Million in Cannabis Tax Revenue

The first quarter of 2018 has yeilded California $60.9 million dollars in tax revenue according to the California Department of Fees and Administration (CDTFA) formerly known as the the Board of Equalization. This does not include any taxes collected locally by cities and counties.

On January 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 (It adds a 15% fee on top of every marijuana purchase, the state also imposes excise taxes on alcohol and gasoline, among other products). The CDTFA says more than half of that money, $32 million, came from the state’s new excise tax on marijuana products.

State sales tax revenue from marijuana sales pulled in an additional $27.3 million. Cannabis users are exempt from sales tax if they have a valid Medical Marijuana Identification Card, but they must still pay the 15% excise tax. A state tax on marijuana cultivation, which applies to anyone growing marijuana in California, brought in $1.6 million.

Legal marijuana sales are eventually expected to net state and local governments $1 billion a year in taxes. This goal is not far off if almost $61 million in tax revenue was earned in the first three months the new taxes have been active. As the regulatory system finds its ground and those in the cannabis business come up to compliance, we can expect that $61 million to go nowhere but up.

The cannabis business in California is growing and the new regulations are vast. Make sure your business filing the appropriate taxes and stays in compliance.

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