Medical Cannabis Initiative

Hands picking cannabis

Medical Cannabis Licensing Initiative:

Legislative effort to establish a taxing and regulatory structure for the sale of medical cannabis by licensing manufacturers, controlling distributors and dispensaries of medical marijuana, and collecting state tax revenues.


What is the California State Board of Equalization (BOE) policy regarding sales of medical cannabis?

Leaves of cannabis plants

The sale of medical marijuana has been considered taxable since the inception of the Compassionate Use Act in 1996. However, prior to October 2005, the BOE did not issue seller's permits to sellers of medical cannabis. A policy change was issued in October 2005 and the Board directed BOE staff to issue seller's permits regardless of the fact that the property being sold may be illegal at the federal level. Applicants were also given the option to decline to state the type of property being sold.

How many dispensaries are registered with the BOE?

All sellers of medical cannabis are required to hold a seller's permit. However, the BOE does not have actual numbers for sellers of medical marijuana because dispensaries are not required to identify their business type when registering for a seller's permit and can report total taxable sales without categorizing the specific product sold.

Where does the sales tax levied on marijuana sellers go?

The sales tax for medical marijuana revenue goes to the state's General Fund as well as cities, counties, and other local jurisdictions where the sale was made.

Are these tax revenues tied to any specific programs in the state budget?

No. The tax from the sale of medical marijuana is treated the same as the tax received from the sale of all tangible personal property.



BOE Special Notices

Legislative Analyses

  • Assembly Bill 266 (Cooley): Local Marijuana and Marijuana Products Tax
    Amended 05/11/15
  • Senate Bill 643 (McGuire): Local Marijuana & Marijuana Products Tax
    Amended 06/03/15
  • Assembly Bill 1894 (Ammiano): Medial Cannabis Regulation & Control Act – 2013-2014 Session
    Amended 04/01/14
  • Senate Bill 626 (Calderon): Cannabis Study – 2011-2012 Session
    Amended 05/05/11
  • Proposition 19 – The Regulate, Control and Tax Cannabis Act of 2010
    Draft Analysis – 9/20/10
  • Assembly Bill 390 (Ammiano) Marijuana Fee – 2009-2010 Session
    Introduced 02/23/09
  • Senate Bill 1098 (Migden) Medical Marijuana – 2007-2008 Session
    Introduced 01/14/08
  • Senate Bill 529 (Migden) Tax amnesty: medical cannabis dispensaries – 2007-2008 Session
    Amended 06/14/07

News Stories

Other Information