California Tax Agency Has Seized $168 Million in Illicit Cannabis and Tobacco Products
- Since 2019, California’s tax agency has seized over $168 million in illicit cannabis and tobacco products, including nearly $22 million in the first half of 2026, to combat illegal sales and tax evasion.
- Governor Gavin Newsom emphasized the importance of enforcing tax laws to protect legal businesses, remove illicit products, and secure revenues for vital state programs funded by cannabis taxes.
- The Unified Cannabis Enforcement Task Force, involving multiple state agencies, has seized more than $1.3 billion in illicit marijuana, and the state awarded $227 million in grants to local governments to enhance enforcement efforts.
- High compliance rates were reported for intoxicating hemp (99.32%) and kratom/7-hydroxymitragynine products (97.62%) following thousands of inspections and removal of illegal products from the market.
California’s tax agency has seized more than $168 million worth of illicit cannabis and tobacco products since 2019, including nearly $22 million during the first half of 2026.
Governor Gavin Newsom announced the figures Thursday, highlighting the California Department of Tax and Fee Administration’s role in investigating tax evasion and removing illegal products from retail businesses.
“California’s work doesn’t stop at shutting down illegal operations,” Newsom said. “We’re protecting the legal businesses that play by the rules by enforcing our tax laws, removing illicit products from the marketplace, and ensuring the revenues that fund vital state programs are protected.”
The department’s enforcement efforts complement operations targeting illegal marijuana cultivation, manufacturing and trafficking. Inspectors and investigators examine business and financial records, recover unpaid taxes and seize products being sold outside the state’s regulated system.
“When California voters approved Proposition 64 and legalized cannabis, they also approved a tax structure to ensure that cannabis contributes to the state’s revenue,” said California Government Operations Secretary Nick Maduros. “We can’t let illicit operators siphon away dollars that are needed for schools, roads, parks, first responders and all the other services on which Californians rely.”
The announcement comes after California awarded $227 million in grants to local governments in June to combat illicit cannabis activity and strengthen coordinated enforcement.
The state says the Unified Cannabis Enforcement Task Force has seized more than $1.3 billion in illicit marijuana since it was established. The task force includes the Department of Cannabis Control, California Department of Fish and Wildlife, California Highway Patrol, Department of Justice and the tax department.
California also reported a 99.32% compliance rate with the state’s intoxicating hemp restrictions among businesses licensed by the Department of Alcoholic Beverage Control. Inspectors conducted 23,174 site visits and removed 7,403 illegal products from store shelves.
Enforcement of restrictions on kratom and products containing 7-hydroxymitragynine, commonly known as 7-OH, has resulted in a 97.62% compliance rate following 7,333 inspections and the removal of 6,981 prohibited products.