The California cannabis industry generated nearly $248 million in tax revenue during Q1 2026, according to the California Department of Tax and Fee Administration.
The total includes $143.6 million in cannabis excise taxes and $104.3 million in cannabis sales taxes. The figures do not account for outstanding returns or those that are still being processed, officials said in a press release.
The quarterly tax revenue represents a dip from the previous quarter, which officials amended to $257.6 million (up from $255.1 million) due to amended and late returns.
Additionally, based on the latest numbers, the market’s total tax revenues since California launched adult-use cannabis sales have now exceeded $8.1 billion, including $4.34 billion in excise taxes, over $3.28 billion in sales taxes, and $500.6 million in a now-suspended cultivation tax, which lawmakers eliminated in 2022.
The cannabis excise tax is applied at the retail level based on gross receipts. The state sales tax is added after the excise tax has been applied.
Meanwhile, in March, the Los Angeles City Council asked city officials to draft language for an “amnesty” program for cannabis businesses in the city, which collectively owed hundreds of millions in back taxes and fees.
