The key to the long-term success of every medical or adult-use cannabis business in California will be found in the management of tax liabilities. The usual reasons for long-term success in business – creativity, perseverance, experience, business acumen and connections – are important. The management of the direct and indirect impact of the multiple taxes to which California cannabis businesses are subject, and the preparation and maintenance of the financial records required for the management of these tax liabilities, will, however, prove to be the single most important factor in the success of a California cannabis business in the long-term.
Do not stop reading this article based on the premise the above statement does not apply to you because you are a well-established cultivator and the bulk of the taxes on cannabis apply to dispensaries and distributors. Taxes impact the amount a cultivator will receive. All of the money that various governmental agencies take out of California’s cannabis industry is not available to pay costs and to provide profits. Cultivators, distributors and dispensaries must split the money that is left after all of the taxes on cannabis are paid.featured