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Revenue from Cannabis Tax in California Falls Short of Projections

Marijuana and Cannabis Tax

In 2018, the first year of regulated sales, California took in more than $345 million in tax revenue from the sale of legal cannabis. That’s almost two thirds less than the $1 billion in annual revenue projected by analysts. They predicted that California, once the state’s regulated cannabis industry was in full gear, would generate $1 billion in tax revenue.

According to figures released by the California Department of Tax and Fee Administration, marijuana tax revenues climbed substantially in the first three quarters of the year, from $60.9 million the first quarter to $80.2 million the second quarter to a revised $100.8 million in the third quarter. However, in the fourth quarter, revenue narrowly grew. Cannabis tax revenue for the last quarter took in $103 million.

Included in the take was $50.8 million from California’s 15 percent excise tax on all cannabis sales, $16.4 million from the cultivation tax passed to growers and $36.1 million in sales tax on all recreational products sold.

Regulators, lawmakers and industry personnel say the state’s thriving black market and high taxes are the problems. Governor Newsom has requested National Guard troops to Northern California to combat illegal grows on forest land.

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