California Cannabis Tax Revenue Dips in Q4 2025

*SACRAMENTO, Calif* – California collected $255.1 million in cannabis tax
revenue during the fourth quarter of 2025, according to figures released by
the California Department of Tax and Fee Administration (CDTFA). The figure
is current as of February 18 but may change as the agency continues to
process returns.
Why Q3 was higher: the temporary 19% excise-tax rate

The total — comprising $145.5 million in cannabis excise tax and $109.6
million in sales tax — is down from the $285.5 million ($177.7M excise and
$107.7M sales) collected in the third quarter. But the decline comes with
an asterisk: the state’s cannabis excise tax rate temporarily rose to 19
percent during the July–September period before returning to its standard
15 percent rate on October 1, following Governor Newsom’s signing of AB
564. The higher rate in Q3 naturally inflated that quarter’s haul.
Equity vendor compensation ends with final Q4 installment

The fourth quarter also marked the end of a small-business relief program
that allowed equity-licensed cannabis retailers to keep 20 percent of the
excise tax due on their sales. In its final installment, eligible vendors
retained roughly $1.63 million under the program, which ran from January
2023 through December 31, 2025.

Since legal sales began in January 2018, California’s cannabis market has
generated more than $7.87 billion in cumulative tax revenue for the state.

Additional cannabis tax revenue data is available on the CDTFA Open Data
Portal. To learn more about cannabis taxes in general, visit the Tax Guide
for Cannabis Businesses on the CDTFA website.