California Cannabis Taxes, Beginning January 1st, 2018, the State of California will require new taxes be collected from ALL Cannabis businesses making sales.
Beginning January 1st, 2020, the State of California has raised cannabis taxes.
- A 15 percent excise tax is imposed upon purchasers of cannabis and cannabis products. Retailers are required to collect the excise tax from the purchaser and pay it to the cannabis distributor.
- A tax on the cultivation of cannabis that enters the commercial market is imposed upon cultivators. Cultivators are required to pay the cultivation tax to either a distributor or a manufacturer depending upon the nature of the transaction. The cultivation tax rates are:
- $9.65 per dry-weight ounce of cannabis flowers, and
- $2.87 per dry-weight ounce of cannabis leaves.
- $1.35 per ounce of fresh plant material.
- Additional categories and rates may be specified at a later date
- 7.25% State retail sales tax applies.
Medical Marijuana users are exempt from this tax if they have been issued a State medical marijuana card. This tax still applies to patients who have a medical marijuana recommendation. - Local Municipality taxes varies per city.
STATE TAXES
In 2022 California’s regulated marijuana growers will see some relief from some of the taxes the industry says is stifling the legal market.
Assembly Bill 195 was signed by Gov. Newsom in June after receiving bipartisan support in both houses of the state legislature.
AB-195 will eliminate the cannabis flower tax of over $161 per pound, but the state intends to increase the State Excise tax from 15% in an effort to make up the difference of the lost revenue.
AB-195 also lowers the number of workers a business can employ before being required to enter into a labor peace agreement from 20 employee’s to only 10, further exacerbating the industry, but more about that later.
