The California Department of Tax and Fee Administration (CDTFA) reported cannabis tax revenue today for the fourth quarter of 2024.
Total cannabis tax revenue from fourth quarter returns is $219.0 million, bringing the 2024 total to $995 million, according to the CDTFA. This figure includes $127.8 million in cannabis excise tax and $91.2 million in sales tax collected from cannabis businesses. These figures do not include outstanding returns or returns that still are being processed.
As part of California’s Los Angeles wildfire relief efforts, Governor Newsom announced an automatic three-month return filing and payment extension for taxpayers within Los Angeles County. The extension applies to sales and use taxes and most special taxes and fees, including cannabis tax, and as a result, some tax revenue may be delayed until the April 30, 2025, extension deadline. Additional revenue received for the fourth quarter of 2024 will be included in the next revenue update scheduled for May 2025.
Reported revenue for the third quarter of 2024 returns has been revised to $253.8 million. This includes $150.1 million attributed to cannabis excise tax and $103.7 million to sales tax. These revisions are a result of amended and late returns, as well as other tax return adjustments.
These figures reflect the states’ vendor compensation program. During the fourth quarter, eligible cannabis vendors retained more than $990,000 in vendor compensation.
Eligible retailers may retain 20 percent of the cannabis excise tax due on their retail sales of cannabis or cannabis products for a 12-month period. Cannabis retailers must be approved by the Department of Cannabis Control and CDTFA before claiming vendor compensation. The program runs through December 31, 2025.
Since January 2018, total cannabis tax revenue is more than $6.7 billion, including $3.5 billion in cannabis excise tax and more than $2.7 billion in sales tax. This also includes $500.6 million in cultivation tax, which was eliminated on July 1, 2022, as a result of cannabis tax reform legislation.
Retail sales of cannabis and cannabis products are subject to state and local sales tax. Sales tax applies to sales of cannabis, cannabis products, the cannabis excise tax, and sales of 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.
Additional cannabis tax revenue data is available on the CDTFA Open Data Portal.
