Information for the Cannabis Industry
The Cannabis Excise Tax Applies to
Cannabidiol Products that Contain Cannabis
Cannabidiol (CBD) products containing “cannabis” as defined in the Cannabis Tax Law (Revenue and Taxation Code section 34010) and the Health and Safety Code (Health and Safety Code sections 11018, 11018.1) 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).
“Cannabis” is defined as all parts of the Cannabis sativa L. plant and it excludes industrial hemp, as defined in Health and Safety Code section 11018.5. “Cannabis products” is defined as cannabis that has undergone a process that transforms the cannabis plant material into a concentrate, edible, topical, or among other things that contain cannabis.
In general, CBD products made from industrial hemp, as defined, are not subject to the cannabis excise tax. The California Department of Food and Agriculture (CDFA) regulates the industrial hemp industry. Please contact CDFA for specific information on industrial hemp.