Annual Report on Tax Exemptions for Medicinal Cannabis

Annual Report on Tax Exemptions for Medicinal Cannabis Translate Our Website This Google ™ translation feature provided on the Legislative Analyst's Office (LAO) website is for informational purposes only. The LAO is unable to guarantee the accuracy of this translation and is therefore not liable for any inaccurate information resulting from the translation application tool. Choose your language: × Skip to main content Home --> Policy Areas Capital Outlay, Infrastructure Criminal Justice Economy and Taxes Education Environment and Natural Resources Health and Human Services Local Government State Budget Condition Transportation Other Government Areas Publications The Budget Propositions and Initiatives Staff Careers About Us Search LAO Contact Seth Kerstein See More Publications Like This Back to the Top --> Tweet June 14, 2023 Annual Report on Tax Exemptions for Medicinal Cannabis Statutory Data Reporting Requirement. Chapter 837 of 2019 (SB 34, Wiener) established new tax exemptions for donations of medicinal cannabis. The law directs our office to submit an annual report containing data on three outcomes related to the exemptions: the number of medicinal cannabis patients served, the amount of medicinal cannabis products donated, and the amount of tax revenue lost. This report fulfills that statutory requirement for 2022. Data Source. Our office obtained the data described below from the Department of Cannabis Control and the California Department of Tax and Fee Administration (CDTFA). The data come from the state’s Metrc “track and trace” system for licensed cannabis. In particular, the data reflect transactions that businesses identified as medicinal donations in calendar year 2022. Number of Patients Served. In 2022, licensees identified 47,371 transactions as medicinal donations. The data do not tell us who received each donation. Some patients likely received more than one donation in 2022, so this total likely overstates the number of distinct patients. For example, if a patient received six donations in 2022, then the transaction total includes that person six times. Amounts of Products Donated. As shown in Figure 1, licensees donated a wide variety of products in 2022. Figure 1 Amounts of Products Donated Under SB 34 Exemption in 2022 Product Total Packages a Capsule 5,298 Clone—Cutting 402 Edible 122,748 Extract 20,387 Flower (other) 8,162 Flower (eighth) 106,241 Flower (gram) 1,933 Flower (half ounce) 12,206 Flower (ounce) 3,671 Flower (quarter) 5,733 Immature Plant 503 Infused Butter/Oil 29 Other Concentrate 23,502 Pre Roll Flower 33,221 Pre Roll Infused 31,080 Pre Roll Leaf 3,570 Seeds 4 Shake (Eighth) 720 Shake (Gram) 276 Shake (Half Ounce) 493 Shake (Ounce) 22 Shake (Quarter) 264 Tincture 11,622 Topical 8,000 Vape Cartridge 21,776 a Donations included an additional three ounces of flower distributed among an unspecified number of packages. Cultivation Tax Revenue Lost. CDTFA estimates that the 2022 revenue loss from the SB 34 cultivation tax exemption was roughly $142,000. The cultivation tax ended on July 1, 2022. When it was in effect, its revenue went to the Cannabis Tax Fund created by Proposition 64 (2016). Use Tax Revenue Lost. CDTFA estimates that the 2022 revenue loss from the SB 34 use tax exemption was roughly $267,000. Revenue from the use tax goes to the state’s General Fund and to local programs. Subscribe | California State Legislature | Online Voter Registration | Privacy Policy | Accessibility Legislative Analyst's Office | The California Legislature's Nonpartisan Fiscal and Policy Advisor 925 L Street, Suite 1000 Sacramento, CA 95814 | (916) 445-4656