California collects $216 million in cannabis revenue for the first quarter

First quarter cannabis tax revenues for 2023 are in and the California Department of Tax and Fee Administration reports that as of May 16, 2023 the collected revenue is $216.2 million.

This figure does not include taxes collected locally by counties and cities, outstanding and unprocessed 2023 returns or $24.9 million in excise tax paid to distributors in 2022 and previously reported by retailers.

The first quarterly business returns were due May 1, 2023 and this accounted for $104.3 million in excise taxes collected, reported and paid by retailers. The excise tax is currently 15% of the price on cannabis goods, but is expected to change by summer next year.

Any excise tax paid before January 1, 2023 can be claimed as a credit. Cannabis businesses’ first quarter returns also reported $111.9 million in sales tax bringing the total sales taxes collected to $1.9 billion since 2018. $2.4 billion in cannabis excise taxes were collected over the same 5 year period.

Cannabis, cannabis products, and other merchandise such as pipes, rolling papers and shirts are subject to sales tax, some medicinal cannabis is not. A valid Medical Marijuana Identification Card issued by the California Department of Public Health exempts patients from sales and use taxes.

Cannabis tax rules have changed for 2023. Cannabis retailers are now responsible for collecting, reporting and paying the excise tax and must register for a cannabis retailer excise tax permit.