As a licensed cannabis distributor, you are required to collect the cannabis excise tax from retailers you supply with cannabis or cannabis products (cannabis). There may be instances when there are multiple distributors involved in the transaction. You are responsible for collecting the excise tax if you are the distributor that does the following:
- Sells and/or invoices cannabis to the retailer; or
- Transfers cannabis to the retailer on behalf of a manufacturer or cultivator.
You must provide the retailer an invoice or receipt indicating, among other requirements, the amount of cannabis excise tax collected. You are required to report (based on the average market price) and pay the cannabis excise tax to the California Department of Tax and Fee Administration (CDTFA) in the reporting period in which you sell or transfer the cannabis to the retailer.
The Bureau of Cannabis Control (Bureau) is the state agency that regulates the requirements for all licensed distributors. A Distributor-Transport Only licensee (Type 13) may transport cannabis goods between licensees; however, they shall not transport any cannabis goods, except for immature cannabis plants and seeds, to a licensed retailer or licensed microbusiness authorized to engage in retail sale. If you are a Distributor licensee (Type 11) that provides transportation services for another licensed distributor and transport cannabis to a retailer on behalf of the distributor that sells and/or invoices the cannabis to the retailer, you are not responsible for the collection or payment of the cannabis excise tax. You should maintain documentation, such as a shipping manifest or invoice between the two distributors that indicates that the transaction between the distributors is for transportation services only and the cannabis excise tax was not collected.
If you have specific questions regarding the distributor license, please email the Bureau at firstname.lastname@example.org.
This announcement is intended to give you an overview of some of the requirements for cannabis distributors and does not address all requirements for the cannabis industry. We encourage you to read CDTFA’s online Tax Guide for Cannabis Businesses, or contact them at www.cdtfa.ca.gov/contact.htm.