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Commercial Cannabis Business Tax

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Cannabis-cropped

Visit the official Monterey County Cannabis Program website

General Information

The commercial cannabis business tax is a tax due for engaging in commercial cannabis business in the unincorporated area of Monterey County. A commercial cannabis business is defined as any commercial business activity relating to cannabis, including but not limited to cultivating, transporting, distributing, manufacturing, compounding, converting, processing, preparing, storing, packaging, delivering, and selling (wholesale and/or retail sales) of cannabis and any ancillary products and accessories in the unincorporated area of the County, whether or not carried on for gain or profit. (MCC Sec. 7.100.040 (E))

Monterey County Code, Section 7.100* and the Administrative Rules and Procedures for Commercial Cannabis Business Tax promulgated by the Monterey County Treasurer-Tax Collector provide that all persons or entities engaged in commercial cannabis activities, as defined therein, are subject to a commercial cannabis tax as of January 1, 2017.

All proceeds from the tax imposed are placed in the County’s general fund and are used for general governmental purposes.

*adopted July 12, 2016; amended July 24, 2018

Tax Rates

The tax rates for commercial cannabis business within the unincorporated area of Monterey County are established in Chapter 7.100 of the Monterey County Code. A summary of the tax rates, as amended on July 24, 2018, are provided below and should not be relied upon as a substitute for a full review of MCC§ 7.100.

Indoor Cultivation

  • July 1, 2018 – June 30, 2020: The initial tax rate is eight dollars ($8.00) per fiscal year, per square foot of canopy authorized by each County permit, or by each state license in the absence of a county permit, not deducting for unutilized square footage.
  • July 1, 2020 – June 30, 2026: Beginning on July 1, 2020, the tax rate shall automatically increase each fiscal year by one dollar ($1.00) per square foot of authorized canopy, not to exceed a rate of fifteen dollars ($15.00) per square foot.
  • July 1, 2026 and thereafter: Beginning on July 1, 2026 and on July 1 of each succeeding fiscal year thereafter, the amount of the tax shall be increased by the most recent change in the annual average of the Consumer Price Index (“CPI”) for all urban consumers in the San Francisco-Oakland-San Jose areas as published by the United States Government Bureau of Labor Statistics. However, no CPI adjustment resulting in a decrease of the tax will be made.

Mixed Light Cultivation

  • July 1, 2018 – June 30, 2020: The initial tax rate is five dollars ($5.00) per fiscal year, per square foot of canopy authorized by each County permit, or by each state license in the absence of a County permit, not deducting for unutilized square footage.
  • July 1, 2020 – June 30, 2029: Beginning on July 1, 2020, the tax rate shall automatically increase each fiscal year by one dollar ($1.00) per square foot of authorized canopy, not to exceed a rate of fifteen dollars ($15.00) per square foot.
  • July 1, 2029 and thereafter: Beginning on July 1, 2029 and on July 1 of each succeeding fiscal year thereafter, the amount of the tax shall be increased by the most recent change in the annual average of the Consumer Price Index (“CPI”) for all urban consumers in the San Francisco-Oakland-San Jose areas as published by the United States Government Bureau of Labor Statistics. However, no CPI adjustment resulting in a decrease of any tax imposed by this section shall be made.

Nursery Cultivation

  • July 1, 2018 – June 30, 2020: The initial tax rate is one dollar ($1.00) per square foot of canopy authorized by each County permit, or by each state license in the absence of a County permit, not deducting for unutilized square footage.
  • July 1, 2020 – June 30, 2024: Beginning on July 1, 2020, the tax rate shall automatically increase each fiscal year by one dollar ($1.00) per square foot of canopy for cannabis cultivation as a nursery, not to exceed the maximum tax rate of five dollars ($5.00) per square foot.
  • July 1, 2024 and thereafter: Beginning on July 1, 2024 and on each July 1 of each succeeding fiscal year thereafter, the amount of each commercial cannabis business tax shall be increased by the most recent change in the annual average of the Consumer Price Index (“CPI”) for all urban consumers in the San Francisco-Oakland-San Jose areas as published by the United States Government Bureau of Labor Statistics. However, no CPI adjustment resulting in a decrease of the tax will be made.

Manufacturers

  • July 1, 2018 - June 30, 2019: The initial tax rate is two and one-half percent (2.5%) of the gross receipts per fiscal year.
  • July 1, 2019 and thereafter: Beginning on July 1, 2019, the tax rate will increase each fiscal year by one percent (1%), not to exceed a maximum tax rate of ten percent (10%) per fiscal year on gross receipts.

Distributors/Distribution Facilities

  • July 1, 2018 - June 30, 2019 – The initial tax rate is two percent (2%) of the gross receipts per fiscal year.
  • July 1, 2019 and thereafter – Beginning on July 1, 2019, the tax rate will increase each fiscal year by one percent (1%), not to exceed a maximum tax rate of ten percent (10%) per fiscal year on gross receipts.

Testing Laboratories

  • The tax rate, effective July 1, 2018, is one percent (1%) of the gross receipts per fiscal year.

Dispensaries

  • July 1, 2018 - June 30, 2019: The initial tax rate is four percent (4%) of the gross receipts per fiscal year.
  • July 1, 2019 and thereafter: Beginning on July 1, 2019, the tax rate will increase each fiscal year by one-half percent (0.5%), not to exceed a maximum tax rate of ten percent (10%) per fiscal year on gross receipts.

Personal Cultivation/Personal Use

Business License

A business license issued by the Monterey County Treasurer-Tax Collector is required for all commercial cannabis businesses within unincorporated Monterey County. For more information on the application process for a business license, please visit Business License Information.

ADDITIONAL RESOURCES

Monterey County Code, Chapter 7.02

Administrative Rules and Procedures for Commercial Cannabis Business Tax

Initial Commercial Cannabis Business Registration Form - Due 9/15/2018

Commercial Cannabis Business Tax - FAQ's

Commercial Cannabis Business Tax - Payment Schedule

Cannabis Permitting Information

Monterey County Cannabis Program Information

Business License Information

 

 

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