The CDTFA released an update recently relating to the cannabis excise tax on CBD products. For a quick refresher on the cannabis excise tax, take a look at our guide for cannabis retailers. As you prepare your cannabis taxes, here’s what you need to know about the excise tax on cannabidiol products.
Cannabis and CBD Products: Definitions
Per direction from the CDTFA, "Cannabis" refers to all parts of the Cannabis sativa L. plant, excluding industrial hemp. Likewise, "Cannabis products" refers to cannabis and cannabis plant material that has been processed and transformed into defined as cannabis that has undergone a process that transforms it into a concentrate, edible, topical, or other things that contain cannabis.
Does Cannabidiol count as cannabis products?
Cannabidiol comes from both the hemp and marijuana varieties of cannabis. In this case, the CDTFA is focused on the marijuana variety: hemp varieties only have small amounts of THC and have been legal in the US for a while. Therefore. CBD products made from industrial hemp are not subject to the cannabis excise tax. Check with the California Department of Food and Agriculture (CDFA) for specific regulations related to the industrial hemp industry.
CBD and Excise Tax Regulations
Cannabidiol (CBD) products containing "cannabis" are subject to the cannabis excise tax. CBD products that do not contain cannabis are not subject to the cannabis excise tax, even if the CBD product contains trace amounts of Tetrahydrocannabinol (THC).
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