Laws, Regulations and Annotations
Business Taxes Law Guide – Revision 2023
Cannabis Tax Law
Revenue and Taxation Code
Division 2. Other Taxes
Part 14.5. Cannabis Tax
34014. Permits. (a)(1) Until January 1, 2023, all distributors must obtain a separate permit from the department pursuant to regulations adopted by the department. No fee shall be charged to any person for issuance of the permit. Any person required to obtain a permit who engages in business as a distributor without a permit or after a permit has been canceled suspended, or revoked, and each officer of any corporation that so engages in business, is guilty of a misdemeanor.
(2) On and after January 1, 2023, all cannabis retailers shall obtain a separate cannabis tax permit from the department pursuant to regulations adopted by the department. A fee shall not be charged to any person for issuance of the permit. Any person required to obtain a permit who engages in business as a cannabis retailer without a permit or after a permit has been canceled, suspended, or revoked, and each officer of any corporation that so engages in business, is guilty of a misdemeanor.
(b) The department may require every licensed distributor, retailer, cultivator, microbusiness, nonprofit, or other person required to be licensed, to provide security to cover the liability for taxes imposed by state law on cannabis produced or received by the retailer, cultivator, microbusiness, nonprofit, or other person required to be licensed in accordance with procedures to be established by the department. Notwithstanding anything herein to the contrary, the department may waive any security requirement it imposes for good cause, as determined by the department. "Good cause" includes, but is not limited to, the inability of a distributor, retailer, cultivator, microbusiness, nonprofit, or other person required to be licensed to obtain security due to a lack of service providers or the policies of service providers that prohibit service to a cannabis business.
(c) In fixing the amount of any security required by the department, the department shall give consideration to the financial hardship that may be imposed on licensees as a result of any shortage of available surety providers.
History—Added by Proposition 64, approved by voters at the November 8, 2016 election, in effect November 9, 2016. Stats. 2017, Ch. 27 (SB 94), in effect June 27, 2017, substituted "cannabis" for "marijuana" throughout; substituted "distributors" for "persons required to be licensed involved in the cultivation and retail sale of marijuana or marijuana products" after "All" in the first sentence and substituted "distributor" for "cultivator, dispensary, retailer, microbusiness or nonprofit pursuant to Chapter 3.5 (commencing with Section 19300) of Division 8 or Division 10 (commencing with Section 26000) of the Business and Professions Code" after "engages in business as a" in the second sentence, of subdivision (a); substituted "distributor, retailer," for "dispensary," after "every licensed" and added "retailer" after "received by the" in the first sentence, added "distributor, retailer" after "inability of a" in the third sentence, and substituted "executed," for "executed" in the fourth sentence, of subdivision (b). Stats. 2022, Ch. 56 (AB 195), in effect June 30, 2022, substituted "department" for "board" throughout; redesignated former subdivision (a) as paragraph (a)(1); substituted "Until January 1, 2023, all" for "All" before "distributors must obtain" in the first sentence and substituted "that" for "which" after "of any corporation" in the second sentence of paragraph (1) and added paragraph (2) to subdivision (a); deleted former fourth sentence that read "A person may not commence or continue any business or operation relating to cannabis cultivation until any surety required by the board with respect to the business or operation has been properly prepared, executed, and submitted under this part." in subdivision (b).