Background. In November 2016, California voters approved Proposition 64, which legalized the nonmedical use of cannabis. Proposition 64 created two excise taxes on cannabis: a retail excise tax and a cultivation tax. Chapter 56, Statutes of 2022 (AB 195, Committee on Budget) eliminated the cultivation tax on July 1, 2022.
Preliminary Total for Second Quarter of 2024: $154 Million. The administration currently estimates that retail excise tax revenue was $154 million in the second quarter of calendar year 2024 (April through June). The revised estimate for the first quarter of 2024 (January through March) is $157 million, slightly higher than the $153 million preliminary estimate announced in May.
Current LAO Estimate for 2023-24: $644 Million. We currently project cannabis tax revenues of $644 million in 2023-24 and $706 million in 2024-25. As shown in the figure below, these estimates are similar to the revenues anticipated by the 2024-25 budget package, which used a forecast from the 2024 Governor’s May Revision.
