California’s cannabis industry generated nearly $248 million in tax revenue during the first quarter of 2026, according to the California Department of Taxation and Fee Administration.
The total includes $143.6 million in cannabis excise and $104.3 million in cannabis sales taxes. The figures do not account for unpaid returns or those still being processed, officials at a press release.
Quarterly tax revenue represents a drop from the previous quarter, which officials revised to $257.6 million (from $255.1 million) due to amended and delayed returns.
Additionally, based on the latest figures, the market’s total tax revenue since California began sales of adult-use cannabis now exceeds $8.1 billion, including $4.34 billion in excise taxes, more than $3.28 billion in sales taxes and $500.6 million in a now-suspended cultivation tax, which lawmakers is eliminated in the year 2022.
Cannabis excise duty is applied at the retail level based on gross receipts. State sales tax is added after the excise tax is applied.
Meanwhile, in March, the Los Angeles City Council asked city officials draft language for an “amnesty” program for the city’s cannabis businesses, which collectively owed hundreds of millions in back taxes and fees.
