The California Department of Tax and Fee Administration (CDTFA) recently reported revenue numbers for cannabis sales for the fourth quarter of 2019. As of Feb. 18, 2020, California’s cannabis excise tax generated $84.4 million in revenue reported on the fourth quarter 2019 returns due by Jan. 31, 2020, and the cultivation tax generated $23.6 million.
Sales tax from cannabis businesses totaled $64.7 million in revenue for the same period. Sales tax applies to sales of cannabis, cannabis products, and other tangible personal property. Certain retail sales of medicinal cannabis are exempt from sales and use taxes when the purchaser provides at the time of purchase a valid Medical Marijuana Identification Card issued by the California Department of Public Health and a valid government-issued identification card.
Total tax revenue reported by the cannabis industry is $172.7 million for fourth quarter returns due by Jan. 31, 2020. This does not include tax revenue collected by each jurisdiction. Previously reported revenue for third quarter 2019 returns was revised to $170.1 million, which included $84.4 million in cannabis excise tax, $22.7 million in cultivation tax, and $63 million in sales tax. Revisions to quarterly data are the result of amended and late returns, and other tax return adjustments.
Since January 2018, total program revenue to date is $1.03 billion, which includes $498.1 million in cannabis excise tax, $123.4 million in cultivation tax, and $403.1 million in sales tax.
In November 2016, California voters approved Proposition 64, the Control, Regulate, and Tax Adult Use of Marijuana Act. Beginning on Jan. 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 cannabis 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.
The California Department of Tax and Fee Administration (CDTFA) administers California’s sales and use, fuel, tobacco, alcohol, and cannabis taxes, as well as a variety of other taxes and fees that fund specific state programs. CDTFA-administered programs account for over $70 billion annually which in turn supports local essential services such as transportation, public safety and health, libraries, schools, social services, and natural resource management programs through the distribution of tax dollars going directly to local communities.