Cannabis Reports

California Raises $60.9M from Cannabis Taxes; Lower than Projected

California has raised $60.9 million in cannabis sales through the first quarter of 2018, after recreational cannabis sales began on Jan 1. The state levies a 15 percent excise tax on recreational purchases along with state and local sales taxes. Medical cannabis sales are exempt from the taxes.

“California’s excise tax on cannabis generated $32 million in revenue for the first quarter of calendar year 2018. The cultivation tax generated $1.6 million, and the sales tax generated $27.3 million in revenue.” – California Department of Tax and Fee Administration in a press release

Lawmakers are considering legislation to temporarily lower the tax rate. The bi-partisan legislation is meant to help the legal cannabis industry compete with the illicit market. That bill, which passed the Committee on Business and Professions this week, would reduce the excise tax from 15 percent to 11 percent and suspend the $148-per-pound tax on cultivation.

California Department of Finance Director Michael Cohen told KQED that the cannabis tax revenues were lower than expected. The state had projected $185 million in revenues from the first six months of legal sales.

“We are expecting that to turn over time and ramp up as more people get licensed and as more people get into the system.” – Cohen to KQED

State officials projected revenues of $630 million from cannabis taxes next fiscal year.

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