The California Department of Tax and Fee Administration (CDTFA) is responsible for determining the cannabis mark-up rate every six months. We have determined the cannabis mark-up rate will remain unchanged at 80 percent for the remainder of the 2020 calendar year. To make this determination, we used an analysis of statewide market data to calculate the mark-up rate between the wholesale cost and the retail selling price of cannabis and cannabis products.
The 15 percent cannabis excise tax is based on the average market price of the cannabis or cannabis products sold in a retail sale. The mark-up rate must be used by distributors to compute the average market price of cannabis or cannabis products sold or transferred to a retailer in an arm’s length transaction. In an arm’s length transaction, the average market price is the retailer’s wholesale cost of the cannabis or cannabis products plus the mark-up rate determined by CDTFA.
For current and prior cannabis mark-up rates, see our Special Taxes and Fees rate page at www.cdtfa.ca.gov/taxes-and-fees/tax-rates-stfd.htm, under Cannabis Taxes.
For more information: CTDFACTDFA