The California Department of Tax and Fee Administration (CDTFA) reported cannabis revenue today for the third quarter of 2021. As of November 16, 2021, total cannabis tax revenue from third-quarter returns is $322.34 million. This includes California’s cannabis excise tax, which generated $168.97 million; the cultivation tax, which generated $42.41 million; and $110.96 million in sales tax revenue from cannabis businesses. Third-quarter revenue decreased 6.6 percent from adjusted revenue figures for the second quarter. The total reported cannabis tax revenues do not include locally imposed taxes collected by cities and counties.
Previously reported revenue for the second quarter of 2021 returns was revised to $345.12 million, including $177.38 million in cannabis excise tax, $42.31 million in cultivation tax, and $125.43 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 cannabis tax revenue to date is $3.12 billion, including $1.58 billion in cannabis excise tax, $393.44 million in cultivation tax, and $1.15 billion in sales tax.
In November 2016, California voters approved Proposition 64, the Control, Regulate, and Tax Adult Use of Marijuana Act. 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 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. Sales tax applies to sales of cannabis, cannabis products, and other merchandise such as pipes, rolling papers, and shirts. Certain retail sales of medicinal cannabis are exempt from sales and use taxes when the purchaser holds a valid Medical Marijuana Identification Card issued by the California Department of Public Health. To learn more, visit the Tax Guide for Cannabis Businesses on the CDTFA website.
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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 more than $73 billion annually, which in turn supports essential local 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.