MEDIA RESOURCE: Medical Marijuana/Legalization of Marijuana
What is the California State Board of Equalization (BOE) policy regarding sales of medical marijuana?
The sale of medical marijuana has always been considered taxable. However, prior to October 2005, the BOE did not issue seller's permits to sellers of property that could be considered illegal. 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, or because the applicant for the permit did not indicate what products it sold.
What new policy changes effective in 2016 pertain to the BOE and medical marijuana?
Assembly Bill 266 (effective Jan. 1, 2016) enacted the Medical Marijuana Regulation and Safety Act, which established comprehensive statewide licensure and regulations for commercial medical cannabis activity. The Bureau of Medical Marijuana Regulation (Bureau) is responsible for administering the Medical Marijuana Regulation and Safety Act. Read the Bureau's FAQs. Assembly Bill 266 also requires the BOE, in consultation with the California Department of Food and Agriculture, to adopt a system for reporting the movement of commercial cannabis and cannabis products throughout the distribution chain.
Assembly Bill 243 and Senate Bill 643 (effective Jan. 1 2016) provided additional framework for the Medical Marijuana Regulation and Safety Act. Read the full bills and the BOE's legislative analyses for more information.
How many dispensaries are there in California?
Through June 30, 2016, 1,023 publicly disclosed medical cannabis sellers registered with the BOE filed returns and remitted sales and use tax to the BOE.
How much sales tax does the BOE collect from medical marijuana businesses?
Through June 30, 2016, $575,021,347 taxable sales of marijuana were reported to the BOE, and $50,507,006 was remitted in sales and use tax.
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.
When the excise and cultivator taxes from the Adult Use of Marijuana Act (Proposition 64, 2016) are collected starting in 2018, those revenues will fund:
- Reimbursement for the BOE, Department of Consumer Affairs, Department of Food and Agriculture, Department of Public Health, Department of Fish and Wildlife, Department of Water Resources, Department of Pesticide Regulation, Controller, State Auditor, Legislative Analysts Office, and the Divisions of Labor Standards and Enforcement and Occupational Safety and Health within the Department of Industrial Relations.
- $10 million grant for a public university to research and evaluate the implementation and effects of the Act and make recommendations to the legislature and/or governor as appropriate to possibly amend the act
- $3 million to the Highway Patrol
- $10 million to GOBiz
- $2 million to UC San Diego
The remaining excise and cultivation tax revenues will be allocated:
- 60% to the Youth Education, Prevention, Early Intervention and Treatment Account
- 20% to the Environmental Restoration and Protection Account
- 20% to State and Local Government Law Enforcement Account
BOE Special Notices
- Important Information for Sellers of Medical Marijuana – January 2010
- Information on Sales Tax and Registration for Medical Marijuana Sellers – June 2007
- Important Information for Sellers of Medical Marijuana – February 2007
Full Texts of 2015-2016 Session Bills
- Senate Bill 643 (McGuire): Local Marijuana & Marijuana Products Tax – 2015-2016 Session
- Assembly Bill 266 (Bonta): Medical & Marijuana Products District Tax – 2015-2016 Session
- Assembly Bill 34 (Bonta): Marijuana & Marijuana Producers – 2014-2015 Session
- Assembly Bill 821 (Gipson): Medical Marijuana for Terminally Ill Patients – 2014-2015 Session
- Assembly Bill 1894 (Ammiano): Medial Cannabis Regulation & Control Act – 2013-2014 Session
- Senate Bill 626 (Calderon): Cannabis Study – 2011-2012 Session
- Senate Bill 847 (Correa): Medical Marijuana Indicia Program – 2011-2012 Session
- Proposition 19 – The Regulate, Control and Tax Cannabis Act of 2010
- Assembly Bill 390 (Ammiano) Marijuana Fee – 2009-2010 Session
- Senate Bill 1098 (Migden) Medical Marijuana – 2007-2008 Session
- Senate Bill 529 (Migden) Tax amnesty: medical cannabis dispensaries – 2007-2008 Session
- Testimony on Fiscal and Legal Implications of Legalization and Regulation of Marijuana – October 28, 2009
- Business Taxes Committee Meeting Minutes – October 25, 2005
- Formal Issue Paper (05-009) – October 14, 2005