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What are the taxation rates on cannabis?

Total tax on California cannabis sales varies by location and by type of business. In addition to regular state and local sales tax, California charges a 15% excise tax on recreational marijuana sales. The excise tax gets charged to the retailer and paid to the distributor. The state also charges a sales tax to dispensaries of 8-10%, depending on the location within the state.

Local city or county governments may also tax cannabis sales and typically charge between 5%-15% of sales. In Los Angeles, cannabis sales are taxed as follows:

  • Medicinal Cannabis Sales: 5% of gross receipts
  • Adult-Use Cannabis Sales: 10% of gross receipts
  • Cannabis Transportation: 1% of gross receipts
  • Cannabis Testing: 1% of gross receipts
  • Cannabis Cultivation (wholesale sales): 2% of gross receipts

Miscellaneous (other activities such as manufacturing & packaging):  2% of gross receipts

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