Taxes on Legal Cannabis Sales Raise Millions of Revenue for California
$283.7 million in tax revenue raised in the third quarter of 2025 alone
by: Chris Ponce / Fox5 San Diego / Dec 2, 2025
Legal cannabis sales in California brought $283.7 million in tax revenue in the third quarter of 2025, the California Department of Tax and Fee Administration (CDTFA) announced Tuesday.
Cannabis excise tax revenue funds childcare programs, youth substance abuse prevention, environmental recovery, medical research and more, according to CDTFA. Officials shared that more than $7 billion in cannabis tax revenue has been raised since 2018.
During the third quarter, July to September, this tax rate temporarily increased 19%. However, the tax rate returned to 15% following legislation signed by Governor Gavin Newsom.
“We’re rolling back this cannabis tax hike so the legal market can continue to grow, consumers can access safe products, and our local communities see the benefits,” Newsom said in a news release.
Assembly Bill 564 stops a 25% tax increase on the cannabis industry, hoping to promote long-term success of the industry in California.

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