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California exempts medical cannabis

  • Nov 21, 2016 | Gail Cole

 California now exempts medical marijuana for qualified consumers.

Certain sales of medical marijuana are exempt from California sales and use tax due to the November 8, 2016 passage of Proposition 64 — The Control, Regulate and Tax Adult Use of Marijuana Act.

Retail sales of recreational cannabis will not begin in California until January 1, 2018. However, the medical cannabis tax exemption has begun. According to the California State Board of Equalization (BOE), “Sales of medical cannabis to those who have a medical marijuana identification card (MMIC) issued on a county-by-county basis by the California Department of Public Health (CDPH) and a valid government-issued identification card are now exempt from sales and use tax.”

Consumers of medical marijuana should be alerted to the fact that paper recommendations from a physician are “not sufficient to qualify for this sales tax exemption.” Medical marijuana identification cards for both patients and caregivers are available at county health departments (price varies by county). They’re valid for one year, and renewable.

For qualifying exempt medical marijuana sales, retailers should claim a deduction on their sales and use tax returns. Additional information.

Learn more about California sales and use tax.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.