Some of you may already be familiar with California’s cannabis taxation policies, and while it seems rather complex (it is), we’ll try to simplify it for you as best we can. The following applies to purchases only from our dispensary, as there are slight variations in how other businesses conduct their taxes. Check back here regularly for updates.
For Adult-Use Sales:
There are a number of types of taxes involved: a 15% state excise tax, sales tax, Davis adult-use tax, and a Davis community fund tax. At our dispensary, the 15% excise tax is applied to the cost of the product, not included in the price of the product (as was previously incorrectly stated here). Then, Davis has a sales tax of 8.25%. Davis also has a 10% adult-use tax as well as a 1% community fund tax. To conclude, the Davis sales tax, as well as the 11% adult-use + community fund tax is then applied to the subtotal + excise tax. This adds up to roughly 30% in taxes.
For medical recommendation holders:
The 15% state excise tax still applies, as well as the 1% community fund tax. The 10% adult-use tax (Davis) is voided for medical recommendation holders. So, 15% excise tax + 1% community fund tax + sales tax = roughly 25% total tax per transaction.
Patients with a medical recommendation AND state medical cannabis ID card holder:
In this case, Davis voids both the 10% adult-use tax as well as the 8.25% sales tax. This would make the total tax per transaction roughly 16%. It does cost money to obtain a state medical cannabis card, and it must be obtained through your local county office, and it can cost up to 100$ to get it. However, lower-income patients that are insured through Medi-Cal can have their fees halved, lowering the cost of the card to 50$ annually instead of 100$.
It’s not easy to determine what is the best option for each person, but it’s quite evident that in the long run, if you are planning to be a frequent consumer of cannabis, having a medical recommendation along with a cannabis card will prove the most affordable. We will make another post about how to obtain a state medical cannabis card in the coming days. Hope this helps a bit and didn’t compound the confusion!