California's marijuana industry owes the state a quarter-billion dollars in unpaid taxes.
According to Green Market Report, the cannabis sector "as a whole was carrying $250,410,890 in unpaid sales and cannabis taxes, out of a $4.4 billion total in taxes due.”
The report cited data from the California Department of Tax and Fee Administration (CDTFA).
See Also: Colorado's Psychedelics Legal Scenario: Insurance & State Aid, Advisory Board And Local Regulations
Tax attorney Regina Unegovsky said the amount owed by cannabis operators “could easily double when penalties and interest are tacked on.”
It is unclear from the data exactly how many, or which of the Golden State's cannabis businesses, owe the CDTFA. As of Dec. 8, there were 6,109 unique businesses licensed by the state Department of Cannabis Control, with a total of 12,213 licenses.
Per the Green Market Report, San Francisco Bay area-based cultivator Grizzly Peak "owes the state $13.5 million, even though the principal tax balance only totaled $6.8 million."
Jerred Kiloh, president of the United Cannabis Business Association (UCBA), pointed out that the industry's back taxes, plus "future taxes," may exceed $1 billion.
“If (the CDTFA has) got that much debt … it’s even more of an indicator of how much worse it is than the debt bubble side of things between licensees,” he added.
Assembly Bill 195, which Gov. Gavin Newsom signed earlier this year, eliminated the state marijuana cultivation tax and will shift excise tax collections to retailers from distributors as of January 2023.
According to a recent study by Reason Foundation, Good Farmers Great Neighbors and Precision Advocacy underground sales make up three-quarters of all weed sales in the Golden State.
Illegal sales are a concern to some of the biggest players in the California market, such as Curaleaf Holdings, Inc. CURLF, Green Thumb Industries GTBIF, Trulieve Cannabis (OTCQX: TCNNF), Cresco Labs Inc. CRLBF, Verano Holdings Corp. VRNOF, Columbia Care Inc. CCHWF, Ascend Wellness Holdings, Inc. AAWH AAWH, TerrAscend Corp. TER TRSSF, and Jushi Holdings Inc. JUSHF.
Get your daily dose of cannabis news on Benzinga Cannabis. Don’t miss out on any important developments in the industry.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Cannabis rescheduling seems to be right around the corner
Want to understand what this means for the future of the industry? Hear directly for top executives, investors and policymakers at the 19th Benzinga Cannabis Capital Conference, coming to Chicago this Oct. 8-9. Get your tickets now before prices surge by following this link.