Posted: 5:39 am, September 5, 2026 by News Staff

Cannabis sales have generated nearly $8.4 billion in California tax revenue since January 2018

– California’s legal cannabis sales generated $261.7 million in tax revenue for the state during the second quarter of 2026, the California Department of Tax and Fee Administration reported.

As of Aug. 18, the department had collected $152 million in cannabis excise tax and $109.7 million in sales tax from cannabis retailers’ second-quarter returns. The figures do not include outstanding returns or returns that were still being processed.

The state revised reported revenue from first-quarter 2026 returns to $249.8 million, up from $247.9 million. The revised total includes $144.7 million in cannabis excise tax and $105.1 million in sales tax. The revisions resulted from amended and late returns, as well as other tax return adjustments.

Since January 2018, cannabis sales have generated nearly $8.4 billion in tax revenue, including almost $4.5 billion in cannabis excise tax and almost $3.4 billion in sales tax. The total also includes $500.6 million in cultivation tax collected through July 1, 2022, when the cultivation tax was eliminated.

Retailers must collect the cannabis excise tax from buyers based on gross receipts from sales of cannabis or cannabis products. Sales tax applies to the price after the cannabis excise tax has been added.

The cannabis excise tax accounts for more than half of the tax revenue from retailers’ quarterly returns. The revenue supports programs for childcare and early childhood development, medical research, youth substance abuse prevention, environmental recovery, and other programs.

Additional cannabis tax revenue data is available through the California Department of Tax and Fee Administration’s Open Data Portal.

More information about cannabis taxes is available in the Tax Guide for Cannabis Businesses.

The California Department of Tax and Fee Administration administers the state’s sales and use, fuel, tobacco, alcohol, and cannabis taxes, as well as other taxes and fees that fund specific state programs.

Department-administered programs accounted for more than $97.8 billion in the 2024-25 fiscal year. The funds support local services including transportation, public safety and health, libraries, schools, social services, and natural resource management programs through the distribution of tax dollars directly to local communities.