Marijuana businesses in Los Angeles are facing steep new costs after the City Council approved a series of fee increases on Tuesday, impacting everything from license renewals to inspections.
The newly approved fee structure is projected to bring in $6 million a year, helping to fund the DCR’s $8.6 million budget. City officials say the department is legally required to recover its operating costs through fees and related charges.
Cannabis tax revenue in Los Angeles has fallen sharply in recent years, dropping from over $100 million to $90 million in 2024. On top of state taxes, the city levies a gross receipts tax on marijuana companies, which ranges from 10% for retailers and delivery operators to 1% for testing labs and distributors.
“This is a difficult but necessary action for the continued functions of the department and to avoid further strain on our General Fund,” said Councilmember Imelda Padilla.
But many in the industry argue the timing couldn’t be worse. “The fees are coming at a really bad time for industry folks,” said cannabis attorney Bryan Bergman. “And it’s a very significant increase.”
