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 taking effect in 2016 pertain to the BOE and medical marijuana?
Assembly Bill 266 (effective Jan. 1, 2016) enacts the Medical Marijuana Regulation and Safety Act, which establishes comprehensive statewide licensure and regulations for commercial medical cannabis activity that protects patients, promotes public safety, and preserves the environment while maintaining respect for local control. 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) provide 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?
Data collected by the BOE, MuniServices, and Hdl Companies shows that 1,623 dispensaries had accounts to file taxes in filing year 2014.
How much sales tax does the BOE collect from medical marijuana businesses?
Data collected by the BOE, MuniServices, and Hdl Companies shows that in 2014, the 1,623 dispensaries registered with the BOE reported $570 million in taxable income, which amounted to $49.5 million in tax due to the state.
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
- 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