Whoa, How Much? CA's Canabis Industry Owes A Quarter-Billion Dollars In Back Taxes

Zinger Key Points
  • Jerred Kiloh, UCBA president, pointed out that the industry's back taxes, plus "future taxes," may exceed $1 billion.
  • It is unclear how many, or which of the Golden State's cannabis businesses, owe the CDTFA.
Whoa, How Much? CA's Canabis Industry Owes A Quarter-Billion Dollars In Back Taxes

California's marijuana industry owes the state a quarter-billion dollars in unpaid taxes.

According to Green Market Report, the cannabis sector "as a whole was carrying $250,410,890 in unpaid sales and cannabis taxes, out of a $4.4 billion total in taxes due.”

The report cited data from the California Department of Tax and Fee Administration (CDTFA).

See Also: Colorado's Psychedelics Legal Scenario: Insurance & State Aid, Advisory Board And Local Regulations

Tax attorney Regina Unegovsky said the amount owed by cannabis operators “could easily double when penalties and interest are tacked on.”

It is unclear from the data exactly how many, or which of the Golden State's cannabis businesses, owe the CDTFA. As of Dec. 8, there were 6,109 unique businesses licensed by the state Department of Cannabis Control, with a total of 12,213 licenses.

Per the Green Market Report, San Francisco Bay area-based cultivator Grizzly Peak "owes the state $13.5 million, even though the principal tax balance only totaled $6.8 million."

Jerred Kiloh, president of the United Cannabis Business Association (UCBA), pointed out that the industry's back taxes, plus "future taxes," may exceed $1 billion.

“If (the CDTFA has) got that much debt … it’s even more of an indicator of how much worse it is than the debt bubble side of things between licensees,” he added.

Assembly Bill 195, which Gov. Gavin Newsom signed earlier this year, eliminated the state marijuana cultivation tax and will shift excise tax collections to retailers from distributors as of January 2023.
According to a recent study by Reason Foundation, Good Farmers Great Neighbors and Precision Advocacy underground sales make up three-quarters of all weed sales in the Golden State.

Illegal sales are a concern to some of the biggest players in the California market, such as Curaleaf Holdings, Inc. CURLF, Green Thumb Industries GTBIF, Trulieve Cannabis (OTCQX: TCNNF), Cresco Labs Inc. CRLBF, Verano Holdings Corp. VRNOF, Columbia Care Inc. CCHWF, Ascend Wellness Holdings, Inc. AAWH AAWH, TerrAscend Corp. TER TRSSF, and Jushi Holdings Inc. JUSHF.

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Photo: Courtesy Of Jon Tyson On Unsplash

Posted In: Ascend Wellness HoldingsAssembly Bill 195California Cannabis marketCalifornia Department of Tax and Fee AdministrationColumbia Care Inc.Cresco Labs Inc. Verano Holdings Corp.Curaleaf HoldingsGov. GavinGreen Thumb IndustriesInc.Jushi Holdings Inc.NewsomTerrAscend Corp.Trulieve Cannabis CorpCannabisGovernmentNewsPenny StocksRegulationsSmall CapTop StoriesMarkets

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