Banking & Finance

California Shatters Cannabis Tax Revenue Record In Latest Fiscal Year

California Shatters Cannabis Tax Revenue Record In Latest Fiscal Year - Marijuana Packaging

California saw a strong increase in adult-use marijuana sales in its latest fiscal year, shattering the cannabis tax revenue. The state collected around $817 million. The revenue is 55 percent more marijuana earnings for state treasurers than was generated in the prior fiscal year. The nonpartisan Legislative Analyst’s Office said combined tariffs and cultivation tax revenue for the fourth quarter, which ended in June, amounted to $212 million–roughly tying the first quarter of the fiscal year of the most tax dollars raised in any single three-month period since legal sales launched.

However, the new numbers don’t take into account additional regular sales taxes generated from marijuana, nor do they include any local revenues to municipalities where the exchanges take place. Uniquely, this trend of increased sales and tax revenue has been occurring amid the coronavirus pandemic, which forced many businesses to close and contributed to rising unemployment. The cannabis industry also thrived despite the fact that marijuana businesses are ineligible for federal aid that was afforded to other industries. 

The new figures are a preliminary tally of the state’s marijuana revenue harvest, as it is typically the case that some businesses file their returns late and the quarterly totals are then adjusted upward. Last quarter’s numbers were updated in the new report, for instance, from an estimate of $163 million to a new amount of $197 million. A separate analysis from the California Department of Tax and Fee Administration points out that since January 2018, total recreational cannabis revenue to date for the state is $2.8 billion, which includes $1.4 billion in excise tax, $347 million in cultivation tax, and $1 billion in sales tax. 

California isn’t the only state that has seen massive surges in cannabis sales. A recent scientific analysis of sales data in Alaska, Colorado, Oregon, and Washington State found that marijuana purchases “have increased more during the Covid-19 pandemic than in the previous two years.” In July alone, at least three states saw record-breaking sales for recreational cannabis. It’s great to see states all over, seeing higher sales in cannabis as they continue to conduct business without any financial assistance from financial institutions.

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