August 22, 2022

Voters to Decide on Imposing a General Tax

On February 15, 2022, the County of Los Angeles Board of Supervisors passed a motion directing the Department of Consumer and Business Affairs’ Office of Cannabis Management to start the development and implementation of an equitable commercial cannabis licensing program in the unincorporated areas of Los Angeles County.

L.A. County plans to allow 25 retail, 25 delivery, ten cultivation (indoor or mixed light only), ten distribution, and ten testing licenses businesses within its borders in 2023. Initially, Equity and Equity-building applicants (those with robust equity promoting practices) will be prioritized for approval to operate a commercial cannabis business in the unincorporated areas of Los Angeles County.

While the exact licensing/permitting process has yet to be revealed, here is what L.A. County’s registered voters need to know about the proposed L.A. County Commercial Cannabis tax measure on the November 2022 ballot.

What is Inside the Proposed L.A. County Commercial Cannabis Tax Measure?

On November 8, 2022, L.A. County residents will vote on applying a general tax on commercial cannabis businesses, which will be collected and applied to the County’s general fund.

The current measure that will appear on the ballot would tax L.A. County commercial cannabis businesses at the following rates beginning July 2023:

  • Retail:                      4% of gross receipts
  • Manufacturing:        3% of gross receipts
  • Distribution:             3% of gross receipts
  • Testing:                    1% of gross receipts
  • Cultivation:              $7/sf of canopy (indoor artificial light)

$4/sf of canopy (mixed light)

$4/sf of canopy (outdoor)

$2/sf of canopy space (nursery)

  • Any other type of

Cannabis Business:      4% of gross receipts

The small print behind the measure states the “Board may decrease or increase the tax rates within the maximum approved by the voters after July 1, 2026,” which are listed at:

  • Retail:                      6% of gross receipts
  • Manufacturing:        4% of gross receipts
  • Distribution:             3% of gross receipts
  • Testing:                    2% of gross receipts
  • *Cultivation:            $10/sf of canopy (indoor artificial light)

$7/sf of canopy (mixed light)

$4/sf of canopy (outdoor)

$2/sf of canopy space (nursery)

  • Any other type of

Cannabis Business:      4% of gross receipts

*The tax rates for cultivation will be adjusted annually to reflect inflation in 2027.

The County tax only applies to cannabis businesses located within unincorporated areas of the County.

Pass or fail, we will have an update on the measure once Los Angeles County residents have their say in the November 2022 election.

Contact Our Trusted Cannabis Law Firm in California

If you have questions about obtaining an L.A. County cannabis license, once the County’s cannabis business permitting program is launched in 2023, contact one of our California cannabis law firm specialists today by phone at (310) 912-2960 or online to learn more about the overall eligibility requirements, and how we can help successfully submit your registration and licensing requirements.

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