California’s cannabis tax revenue decreased in the first quarter of 2025.
The big picture: The California Department of Tax and Fee Administration (CDTFA) reported that the total first quarter returns is $237.4 million.
- That total was comprised of $140.6 million from the cannabis excise tax and $96.8 million of the sales tax.
State of play: The department also announced that the fourth quarter returns from last year have been revised to $255.5 million.
- That is up from $219 million, which was the lowest quarter for the state’s cannabis tax revenue since the start of 2020. Every quarter since the first quarter of 2020 has reported at least $249 million in tax revenue. As it stands now, the first quarter revenue from this year is now the single-lowest quarter in five years.
- California had the $36 million increase because of amended and late returns, as well as returns filed by Los Angeles County taxpayers who were granted a three-month return filing and payment extension due to the devastating wildfires at the beginning of the year.
What we’re watching: Reported first quarter revenue will likely increase later in the year as late and amended filings come in.
Zoom out: California has collected over $7 billion in tax revenue since January 2018, which includes $3.7 billion in the excise tax and $2.8 billion in the sales tax.
- That total also includes $500.6 million in the cultivation tax, which was eliminated three years ago.
