California Department of Tax and Fee Administration Reports

Cannabis Tax Revenue Increases in Third Quarter of 2018


Sacramento – The California Department of Tax and Fee Administration (CDTFA) reported increased revenue numbers today for cannabis sales for the 3rd quarter of 2018. Tax revenue reported by the cannabis industry totaled $93.1 million for 3rd quarter returns received through October 31, 2018, which includes state cultivation, excise and sales taxes. It does not include tax revenue collected by each jurisdiction.


California’s cannabis excise tax generated $52.4 million in revenue reported on 3rd quarter returns received through October 31, 2018. The cultivation tax generated $12 million, and the sales tax generated $28.7 million in reported revenue. Retail sales of medicinal cannabis and medicinal cannabis products are exempt from sales and use taxes if the purchaser provides a valid Medical Marijuana Identification card and valid government-issued identification card.


Previously reported revenue for 2nd quarter returns was revised to $80.2 million, which included $42.3 million in excise tax, $4.7 million in cultivation tax, and $33.2 million in sales tax. Revisions to quarterly data in prior periods are the result of amended and late returns, and other tax return adjustments.


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 upon purchasers of cannabis and cannabis products. In addition, retail sales of cannabis and cannabis products are subject to state and local sales tax.


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


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Note: This news release may discuss complex tax laws and concepts. It may not address every situation, and is not considered written advice under the relevant Revenue and Taxation Code section for the tax or fee program listed above. 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.

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