NEWS BRIEF

California marijuana excise tax to remain stable through 2020

The California state cannabis excise tax won’t go up in July as it did in January.

The state Department of Tax and Fee Administration (CDTFA) made that announcement in a little-noticed news release in May.

Per state law, the agency is required every six months to recalculate the markup rate upon which the state’s 15% excise tax is based.

In November, the agency announced that its calculations would result in a tax increase, which went into effect New Year’s Day and led to an outcry from industry insiders who had already been urging policymakers to reduce state MJ taxes.

If another increase had been deemed necessary, it would have gone into effect July 1.

But the agency stated that the current rate will remain unchanged for at least another six months, until its next recalculation.

“We have determined the cannabis markup rate will remain unchanged at 80% for the remainder of the 2020 calendar year,” the CDTFA noted in its bulletin.

“To make this determination, we used an analysis of statewide market data to calculate the markup rate between the wholesale cost and the retail selling price of cannabis and cannabis products.”

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