Cannabis tax return revisions


Starting with the January 2022 and first quarter 2022 filings, cannabis tax returns have been revised such that cannabis distributors will be reporting additional information. (CDTFA Special Notice L-840, (January 2022))

The cannabis excise tax portion of the return will require taxpayers to separately report the average market price for arm’s length transactions and non-arm’s length transactions subject to the 15% cannabis excise tax.

For the cultivation tax portion, the return will now have three schedules to report cannabis that entered the commercial market during the reporting period for each cultivation tax category: cannabis flowers, cannabis leaves, and fresh cannabis plant.

Each cultivation tax schedule will require the following to be reported:

  • Total ounces of cannabis that entered the commercial market in the reporting period, including ounces of medicinal cannabis designated for donation and cannabis designated as trade samples;
  • Ounces of medicinal cannabis designated for donation that are included in total ounces reported, if applicable; and
  • Ounces of cannabis designated as cannabis trade samples that are included in total ounces reported, if applicable.