Despite California’s imperfect marijuana legalization roll-out, the state continues to see revenue trend in the right direction when it comes to legal cannabis. The most recent numbers show the market has put $2.8 billion into the state coffers since the first legal cannabis sale on January 1, 2018. 

For many California voters who don’t use cannabis, the criminal justice reform side of things and taxes were two of the main inspirations for voting yes. In addition to sales tax, the two new cannabis taxes that went into effect were a cultivation tax on all the harvested weed that will eventually make it to the marketplace and a 15 percent cannabis excise tax on weed. 

The will of the voters is administered by the California Department of Tax and Fee Administration. The latest set of numbers come from a CDTFA announcement on the second quarter of fiscal year 2021 that was due on August 2. 

In the second quarter, the excise tax brought in $172.3 million in revenue and the cultivation tax generated $40.4 million.

Since the market opened, California has collected $347 million in cultivation taxes and $1.4 billion in cannabis excise. An additional $1 billion in sales tax makes up the difference to get you to that $2.8 billion figure. In addition to those cannabis specific taxes, the sales tax brought in another $120.5 million for the same period. 

The reported total haul for the cannabis industry is $333.2 million in taxes for 2nd quarter returns.

So how does that weigh in against previous numbers? Very well. The first quarter of 2021 saw a $304.8 million take for the state. A 10 percent jump quarter over quarter would be spectacular for any business, but it gets even wilder when you compare things to this time last year. 

This time last year the CDTFA reported the second quarter of 2020 brought in just north of $200 million and the number was later revised to $260.2 million. That was technically the first full quarter in the pandemic and numbers would end up bumping up about 25% quarter to quarter in that moment as everyone was stuck in the house. But there was such a giant run on weed in March 2020 that it helped put the revenue numbers a bit closer to the following quarter that was entirely within the pandemic. 

As of right now, California’s total take in pot taxes since 2018 is larger than the GDP of 28 countries. Pretty much everywhere smaller than Aruba. But I bet if you took the sales of the last month into account then the number would likely be 30 countries. Aruba was the current cutoff with a GDP of $2.7 billion. 

And it’s worth noting all of this money was collected despite the fact the state’s underground market is still likely at least double the size of the legal market, and that’s if you’re keeping to the lowball side of things. It’s fascinating to speculate how the revenue balance would work out if the bar was lowered to enter the marketplace, because while all of that underground cannabis doesn’t stay in California, plenty does. 


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