For most operators in California’s cannabis industry, the licensed and regulated market probably feels like a slow-burning dumpster fire with no end in sight. But for politicians and state regulators who designed the legalized industry under Proposition 64, the massive new influx of cannabis taxes probably feels like a job well done. Since the adult-use industry was born in 2016, cannabis companies of all shapes and sizes have struggled to survive—much less turn a profit—while the state has raked in billions of dollars. In 2020, California collected $1.1 billion from cannabis companies, and the state was expected to collect $1.3 billion in 2021. Advertisement Under the current tax structure, all products sold in California are subject to a 15-percent excise tax, and cultivators also pay a tax based on the weight of their harvest. Beyond that, there’s a state retail tax of 7.25 percent, and local taxes vary from 5 to 15 percent; Los Angeles, Oakland, and San Jose all collect 10 percent of gross receipts from cannabis businesses. Add it all up, and cannabis companies are paying an effective tax rate of up to 45 percent.
mg Magazine – Cannabis News & Information, 01/11/2022 01:45:00