California Cannabis CPA, Accounting & Tax Services
Specialized CPA support for California cannabis operators in Sacramento, the Bay Area, Los Angeles, and statewide, covering 280E, excise tax, CDTFA compliance, and financial reporting in the largest legal cannabis market in the United States.
Talk to a California Cannabis CPACalifornia Cannabis Businesses Need Specialized Financial Guidance.
California has the largest legal cannabis market in the United States, and one of the most complex tax and regulatory environments for operators. A 15% state excise tax, local cannabis business taxes, CDTFA reporting requirements, and federal 280E limitations create a layered financial challenge that requires specialized expertise to navigate correctly.
GreenGrowth CPAs helps California cannabis operators build stronger accounting systems, improve reporting, plan around 280E, attract investor confidence, and make smarter decisions with clearer financial visibility across every stage of the business. For a full overview of our cannabis-focused practice, see our cannabis CPA services.
Operating cannabis in California and managing 280E exposure?
Book a confidential call with our cannabis CPA team to review your CDTFA position, COGS allocation, and accounting setup.
How 280E Affects California Cannabis Operators in 2026
Section 280E blocks federal deductions for ordinary business expenses when a business traffics in a Schedule I or II drug. On April 28, 2026, marijuana sold under a state medical license moved to Schedule III, so 280E no longer applies to that medical activity going forward. Adult-use cannabis is still Schedule I, and adult-use makes up most California sales, so 280E still applies to most of the market.
If you hold both adult-use (A-type) and medical (M-type) licenses, you now need to split revenue and costs between the two in a way that holds up in an audit. Our guide explains how to split medical and adult-use costs under 280E.
For adult-use sales, the main federal strategy is still maximizing cost of goods sold under Section 471. On the state side, California lets licensed cannabis businesses deduct ordinary expenses on personal income tax returns, and SB 167 extended that rule to tax years beginning before January 1, 2030.
You May Need a California Cannabis CPA If:
- Your effective federal tax rate is higher than expected under 280E
- Your books do not clearly separate COGS from operating expenses
- You operate across multiple California locations or licenses
- You need to improve cash flow visibility around CDTFA tax obligations
- You are preparing for growth, new licenses, or investor reporting
California Cannabis Services We Provide
280E Tax Planning
Tax-aware strategies to help California cannabis operators understand 280E exposure, maximize COGS, and reduce the effective federal tax burden.
California Excise Tax Compliance
Support for California's 15% cannabis excise tax, local business taxes, and CDTFA reporting obligations, keeping operators compliant and current.
Accounting & Financial Reporting
Financial reporting systems that give California cannabis operators clear visibility into profitability, cash flow, and operational performance.
COGS Optimization
Detailed support for tracking cost of goods sold, inventory valuation, production costs, and documentation to support 280E compliance.
Multi-Location Support
Consolidated reporting, entity structuring, and compliance documentation for California operators with multiple licenses, dispensaries, or distribution operations.
Outsourced CFO Services
Strategic financial advisory, forecasting, investor reporting, and cash flow planning for growing California cannabis businesses. Learn more.
California Cannabis Tax Facts
California cannabis operators face one of the most layered tax environments in the country. Understanding each component is essential for planning cash flow and maintaining CDTFA compliance.
A 15% cannabis excise tax applies to retail cannabis sales, collected by retailers and remitted to CDTFA. AB 564 cut the rate back from 19% on October 1, 2025 and holds it at 15% through June 30, 2028.
California eliminated the state cultivation tax effective July 1, 2022, reducing the tax burden on cultivators, but accurate tracking remains required.
Many California cities and counties impose additional local cannabis business taxes on top of state excise tax, varying significantly by jurisdiction.
California cannabis sales are also subject to state and local sales tax, ranging roughly 7.25% to 10.75% depending on the region.
State-licensed medical cannabis moved to Schedule III on April 28, 2026. Adult-use cannabis is still Schedule I, so adult-use sales can only deduct COGS on the federal return.
California legalized medical cannabis in 1996 and adult-use in 2016 (Prop 64). It remains the largest state-level legal cannabis market in the United States, generating over $4 billion in annual licensed sales.
How We Support California Cannabis Operators
Assess
We review your accounting, tax position, entity structure, COGS tracking, and compliance documentation specific to California requirements.
Structure
We identify improvements around COGS allocation, CDTFA reporting, local tax compliance, and 280E-aware accounting workflows.
Plan
We create a practical plan for California tax compliance, cash flow management, and financial visibility across your operations.
Advise
We provide ongoing advisory as California regulations, your license portfolio, and business goals continue to evolve.
Multi-location operator or expanding in California?
Talk with our team about consolidated reporting, entity structure, and 280E planning across your license portfolio.
Cannabis CPA for Sacramento, the Bay Area and Los Angeles
Sacramento
Sacramento operators pay the state's 15% excise tax plus the City of Sacramento's 4% cannabis business operations tax on gross receipts, which is paid monthly. We reconcile city and CDTFA filings, keep books ready for 280E, and plan cash for each payment. We work with Sacramento dispensaries, cultivators, and distributors remotely.
San Francisco Bay Area
Our San Rafael office at 4040 Civic Center Drive serves cannabis operators in San Francisco, Oakland, and the North Bay. Each Bay Area city sets its own cannabis business tax and filing schedule, so we track them by location for multi-site operators. Visit our Bay Area office page.
Los Angeles and Orange County
Our Irvine headquarters and our office on Santa Monica Boulevard support dispensaries, delivery services, and brands across Los Angeles and Orange County, where local cannabis taxes depend on the city and the license type. See our Irvine office and Santa Monica office.
California Cannabis CPA FAQs
What taxes do cannabis businesses pay in California?
Cannabis retailers in California collect a 15% excise tax on retail sales and remit it to CDTFA, along with state and local sales tax. Many cities and counties add their own cannabis business taxes, such as Sacramento's 4% tax on gross receipts. The state cultivation tax ended on July 1, 2022.
How does Section 280E impact California cannabis businesses?
Since April 28, 2026, marijuana sold under a state medical license is Schedule III, so 280E no longer applies to that medical activity going forward. Adult-use cannabis is still Schedule I, so adult-use sales can only deduct cost of goods sold on the federal return. Operators with both license types must split revenue and costs between them. California does not follow 280E on state personal income tax returns.
Do I need a cannabis-specific accountant in California?
Yes. California cannabis businesses face a unique combination of state excise tax, local business taxes, CDTFA reporting, federal 280E limitations, and high operational costs. A cannabis-specialized CPA helps operators navigate all of these while building stronger financial systems for growth and investor confidence.
What financial records are required for cannabis compliance in California?
California cannabis operators should maintain detailed inventory records, point-of-sale data, COGS documentation, payroll records, bank statements, and all CDTFA tax filings. Metrc seed-to-sale tracking records must also be maintained and reconciled with financial records for compliance purposes.
Can GreenGrowth CPAs help multi-location California operators?
Yes. We support California cannabis operators with multiple licenses, dispensary locations, distribution operations, and entities. We help consolidate reporting, improve financial controls, and ensure each location maintains proper CDTFA and local tax compliance documentation.
What cities in California does GreenGrowth CPAs serve?
We serve cannabis businesses across California, including Sacramento, San Francisco, Oakland, Los Angeles, San Diego, Long Beach, and Fresno. We have offices in Irvine, San Rafael, and on Santa Monica Boulevard, and we work with operators anywhere in the state remotely.
What is California's cannabis excise tax rate in 2026?
The rate is 15% of gross receipts from retail sales. AB 564 lowered it from 19% back to 15% for sales on or after October 1, 2025, and keeps it at 15% through June 30, 2028. Retailers collect it from customers and remit it to CDTFA.
Do you work with cannabis businesses in Sacramento?
Yes. We help Sacramento dispensaries, cultivators, and distributors with CDTFA excise tax, the city's 4% cannabis business operations tax, 280E planning, and monthly bookkeeping. We work with Sacramento clients remotely.
Ready to Work With a California Cannabis CPA?
GreenGrowth CPAs helps California cannabis operators with 280E planning, excise tax compliance, CDTFA reporting, accounting systems, and financial strategy. Schedule a confidential consultation to get started.
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