California cannabis sales generate $259.7 million in tax revenue
Cannabis tax collections total $7.3 billion since 2018
– The California Department of Tax and Fee Administration reported that cannabis sales generated $259.7 million in tax revenue for the second quarter of 2025. The total includes $147.3 million from the cannabis excise tax and $112.4 million from sales tax reported by cannabis businesses. The figures, reported as of Aug. 18, do not include outstanding or unprocessed returns.
First-quarter 2025 revenue figures were revised to $243.1 million, up from $237.4 million. That total includes $142.4 million in cannabis excise tax and $100.8 million in sales tax. Revisions reflect amended and late returns, along with other adjustments.
The second-quarter figures also reflect the state’s vendor compensation program, which allowed eligible cannabis vendors to retain more than $1.3 million. The program permits retailers with an equity fee waiver from the Department of Cannabis Control to keep 20 percent of the cannabis excise tax due on sales of cannabis or cannabis products for a 12-month period. The program began Jan. 1, 2023, and runs through Dec. 31, 2025.
Since Jan. 1, 2018, cannabis sales have generated more than $7.3 billion in tax revenue. That includes nearly $3.9 billion in cannabis excise tax, more than $2.9 billion in sales tax, and $500.6 million in cultivation tax collected through July 1, 2022, when the cultivation tax was eliminated under cannabis tax reform legislation.
Retail sales of cannabis and cannabis products are subject to both state and local sales tax. Sales tax is applied to the purchase price after the cannabis excise tax is added.
California voters approved Proposition 64, the Control, Regulate, and Tax Adult Use of Marijuana Act, in November 2016. The law established a 15 percent excise tax on cannabis sales beginning Jan. 1, 2018, as well as a cultivation tax on harvested cannabis that entered the commercial market. The cultivation tax was eliminated in 2022.
Additional cannabis tax revenue data is available on the CDTFA Open Data Portal. More information can be found in the Tax Guide for Cannabis Businesses on the CDTFA website.
