Los Angeles Voters Approve Measure Applying Cannabis Tax to Unlicensed Marijuana Shops
- Los Angeles voters approved Measure CB with 72% support, requiring unlicensed marijuana businesses to pay the city's cannabis business tax.
- The measure extends the existing 10% cannabis business tax, previously applied only to licensed retailers, to unlicensed cannabis shops operating within city limits.
- City officials estimate that Measure CB could generate between $30 million and $35 million in new annual revenue from unlicensed operators.
- The measure aims to address the large unlicensed cannabis market without legalizing unlicensed businesses, providing a new revenue source amid ongoing enforcement efforts and prior tax amnesty discussions.
Los Angeles voters have approved a measure that will require unlicensed marijuana businesses to pay the city’s cannabis business tax.
Measure CB was approved with 72% of the vote. The proposal applies the city’s existing cannabis business tax to unlicensed retailers operating within city limits.
Under current law, licensed marijuana retailers are required to pay a 10% cannabis business tax. Measure CB extends that tax obligation to unlicensed shops, a change city officials projected could generate between $30 million and $35 million in new annual revenue.
The vote comes as Los Angeles continues to grapple with a large unlicensed cannabis market that has long competed with licensed retailers. While the measure does not legalize unlicensed operators or allow them to avoid enforcement, it gives the city another way to collect revenue from businesses operating outside the regulated market.
The passage of Measure CB comes just months after the Los Angeles City Council directed the Office of Finance to prepare language for a potential tax “amnesty” program for licensed cannabis businesses. At the time, licensed marijuana companies in the city collectively owed more than $400 million in back taxes and fees.