California Cannabis Taxes Explained
Learn how cannabis taxes are calculated in California — including local, excise, and sales taxes. Stay informed and know what you're paying.
Understanding Cannabis Taxes at Cannagram
Local Cannabis Business Tax – 4%
As Cannagram is licensed in Sacramento, a 4% local cannabis tax is added to all orders, regardless of delivery address.
State Cannabis Excise Tax – 19%
Effective July 1, 2025, California increased the cannabis excise tax from 15% to 19%. This is a mandatory tax applied to all cannabis sales across the state.
Sales Tax – Varies by ZIP Code
California sales tax applies to cannabis like any other retail product. The base rate is 7.25%, but with local districts, it typically ranges from 8.25% to 8.75%.
Example: How Cannabis Taxes Are Calculated
| Description | Calculation | Amount |
|---|---|---|
| Subtotal | — | $100.00 |
| Local Tax (4%) | $100 × 0.04 | $4.00 |
| Excise Tax (19%) | ($100 + $4) × 0.19 | $19.76 |
| Sales Tax (8.75%) | ($100 + $4 + $19.76) × 0.0875 | $10.83 |
| Total Taxes | — | $34.59 |
| Final Total | — | $134.59 |
How to Save with an MMIC
Qualified medical patients can avoid sales tax by obtaining a Medical Marijuana Identification Card (MMIC) through their local county health department.
- Waives all sales & use tax (~7–10% savings)
- Valid for up to 1 year
- Accepted at all licensed dispensaries
Support Lower Cannabis Taxes
We support AB 564 — legislation aimed at reducing the excise tax back to 15%. You can help us advocate for fairer pricing by sending a message to your legislators.
Take Action NowWhy are cannabis taxes so high?
Cannabis is taxed at the state, local, and retail level. These taxes are also compounded.
Do I pay the same taxes in every city?
No. Local cannabis and sales tax rates vary by city and ZIP code.
Why does Cannagram charge Sacramento's tax?
Because orders are fulfilled from Sacramento, we are required to charge the local tax.
What does "compounded" mean?
Each tax is applied on top of the previous ones — not just on the product price.
How do I avoid sales tax?
By getting a valid Medical Marijuana ID Card (MMIC).
Does Cannagram keep these taxes?
No. All taxes are paid directly to the appropriate government agencies.