California cannabis taxes continued to miss expectations in the second quarter of 2018, bringing in roughly $74 million to state coffers.
The state’s thriving illicit market is likely a big reason, as is the fact that most local governments in California still prohibit legal marijuana businesses and sales.
“After six months of legal cannabis sales, there is a staggering … gap between today’s tax revenue numbers and what voters were promised,” said state Assemblyman Evan Low, a Democrat from Campbell who heads the Business and Professions Committee.
“Regulators must adapt before California’s lawful cannabis businesses are obliterated by the black market.”
According to a news release from the California Department of Tax and Fee Administration (CDTFA), the cannabis tax haul from April 1 through June 30 was $74.2 million, including $43.4 million from the excise tax, $4.5 million from the cultivation tax and $26.2 million from the sales tax.
That brings the state tax total for the first half of 2018 to roughly $134 million, including just under $61 million that was collected in the first quarter, according to the release. The figures don’t include local taxes from municipalities and counties.
The state tax revenues stand in contrast to a projection from Gov. Jerry Brown’s office that California would take in $175 million in the first six months of 2018, meaning the industry is still underperforming even though the second quarter did experience a bump.
To help licensed cannabis companies pay their taxes properly, the CDTFA said it has:
- Opened a new satellite location in Humboldt County.
- Established an MJ tax advisory group.
- Launched a pilot program to help retailers pay their taxes.
- Beefed up security measures for financial transactions.
Associated Press contributed to this report.