Cali Still Focusing on Unpaid Cannabusiness Taxes
Cali legalized adult-use recreational cannabis in the month of January 2018. According to EisnerAmper, the state has generated nearly $4 billion in tax revenues through sales.
Since its legalization in January of 2018, there has been a rise in tax revenue. California Department of Tax and Fee Administration (“CDTFA”) states that cannabis companies licensed and not licensed have a debt of around $200 million in state taxes.
In recent months, the CDTFA has been increasing the number of raids and confiscations of illegal cannabis production facilities and assets. Although the cultivation of cannabis is allowed throughout the entire state, illegal businesses don’t have the right permits to produce commercially. Thus, they’re not paying the same taxes that the state-licensed companies have to pay.
Then, in the course of an interview for the MJBizDaily, CDFTA spokesperson Tamma Amamek explained that the increase in enforcement across all sectors, and is the result of the return to more normal departments and government functions and procedures as we move from the pandemic.
Through the seizure of illegal cannabis properties and more firmly enforcing tax regulations, the CDFTA is working to safeguard both the consumer and the industry operators. This ensures equal working conditions for taxpayers’ businesses and guarantees that cannabis production is conforming to the safety requirements of the state.
Since the CDFTA started partnering with California Highway Patrol, local police forces, and municipal authorities in the year 2020, they’ve completed more than 1,000 business inspections and confiscated beyond $32 million of cash and goods from illegal cannabis-related businesses. The CDFTA has held auctions for confiscated commercial assets of cannabis businesses that aren’t authorized to operate.
“Unlicensed cannabis operators not only undercut legitimate businesses, but they also cheat California communities out of revenue for vital programs,” stated CDTFA Director Nick Maduros in a press announcement. “These businesses are not licensed under the laws approved by California voters, and many of their products are unregulated.”