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.
