California Department of Tax and Fee Administration Adds ‘Fresh’ Category for Cannabis Cultivation Tax

Sacramento January 11, 2018 – The California Department of Tax and Fee Administration (CDTFA) has added a new category and rate for the cannabis cultivation tax, which took effect on January 1, 2018.

Proposition 64, which was approved by voters on November 8, 2016, established a cultivation tax based on the dry-weight ounce of cannabis flowers and leaves. The CDTFA has added a new cannabis cultivation tax category for fresh cannabis plants at a rate of $1.29 per ounce. The cultivation tax rates are:

  • $9.25 per dry-weight ounce of cannabis flowers,
  • $2.75 per dry-weight ounce of cannabis leaves, and
  • $1.29 per ounce of fresh cannabis plant.

All fresh cannabis plants must be weighed within two hours of harvesting.

Cultivators are responsible for paying the cultivation tax on all harvested cannabis entering the commercial market to the distributor (or to the manufacturer if that is where the first transfer or sale of unprocessed cannabis takes place). Manufacturers who collect the cultivation tax are required to pay the tax to the distributor. The distributor reports and pays the cultivation tax to the CDTFA. Cultivation rates are also posted on our website.

For more information, read our Tax Guide for Cannabis Businesses on the CDTFA website. If you have additional questions, you may call our Customer Service Center at 1-800-400-7115 (TTY:711) Monday through Friday, 8:00 a.m. to 5:00 p.m. (Pacific time), except state holidays.

Important Notice: Recent legislation created the California Department of Tax and Fee Administration (CDTFA) to administer the taxes and fees previously collected by the Board of Equalization, with the exception of Property Tax, Alcoholic Beverage Tax and Insurance Tax. Additional information concerning this recent change can be found at www.boe.ca.gov and ​at www.cdtfa.ca.gov. For more information on other taxes and fees in California, visit the California Tax Service Center.

Note: This news release may discuss complex tax laws and concepts. It may not address every situation, and is not considered written advice under Revenue and Taxation Code section 6596 or 55045. Changes in law or regulations may have occurred since the time this news release was written. If there is a conflict between the text of this news release and the law, decisions will be based upon the law and not this news release. For specific help, please contact the CDTFA at 1-800-400-7115.