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Tax revenue report issued for second quarter cannabis sales
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The California Department of Tax and Fee Administration (CDTFA) on Sept. 15 reported tax revenue from cannabis sales for the second quarter of 2025.

As of Aug. 18, total tax revenue from cannabis retailers’ second-quarter returns is $259.7 million. This figure includes $147.3 million in cannabis excise tax and $112.4 million in sales tax reported from cannabis businesses. These figures do not include outstanding returns or returns that are still being processed.

Reported revenue for first-quarter 2025 returns has been revised to $243.1 million, up from $237.4 million. This includes $142.4 million in cannabis excise tax and $100.8 million in sales tax. These revisions are a result of amended and late returns, as well as other tax return adjustments.

The second-quarter figures also reflect the state’s vendor compensation program, which allowed eligible cannabis vendors to retain more than $1.3 million during the quarter. The vendor compensation program allows retailers who have received an equity fee waiver from the Department of Cannabis Control to retain 20 percent of the cannabis excise tax due on their retail sales of cannabis or cannabis products for a 12-month period. The program, which began Jan. 1, 2023, runs through Dec. 31, 2025.

Since January 2018, cannabis sales have generated more than $7.3 billion in tax revenue, including nearly $3.9 billion in cannabis excise tax and more than $2.9 billion in sales tax. This also includes $500.6 million in cultivation tax collected through July 1, 2022, when the cultivation tax was eliminated as a result of cannabis tax reform legislation.

Retail sales of cannabis and cannabis products are also subject to state and local sales tax. Sales tax is applied to the price after the cannabis excise tax has been added.

Additional cannabis tax revenue data is available on the CDTFA Open Data Portal.

In November 2016, California voters approved Proposition 64, the Control, Regulate, and Tax Adult Use of Marijuana Act. As a result, two cannabis taxes went into effect on Jan. 1, 2018: a 15 percent excise tax on purchases of cannabis and cannabis products and a cultivation tax on all harvested cannabis that enters the commercial market. The cultivation tax no longer applies, as of July 1, 2022.

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