Cannabis Business License Taxes & Fees
Taxes and fees are collected for the following cannabis businesses in the City of Long Beach:
- Cannabis Dispensaries
- Cannabis Cultivation Facilities
- Cannabis Manufacturing Facilities
- Cannabis Laboratory Testing Facilities
- Cannabis Distributors
This site is intended to provide information regarding cannabis business license taxes and fees and how to make payments to the City of Long Beach.
Long Beach Municipal Code Chapter 3.80
On November 8, 2016, the citizens of Long Beach voted to approve the City proposed tax measure Measure MA, or Long Beach Municipal Code (LBMC) Section 3.80.261, which updated the City's business license tax for medical and non-medical cannabis businesses. The ordinance outlines tax rates, frequency of payments, penalties, and other regulations related to collecting cannabis business taxes.
Recently, on April 9, 2024, the City Council approved an ordinance amendment to Section 3.80.261 of the Long Beach Municipal Code to reduce the adult-use retail cannabis tax rate from 8% to 7% and cultivation cannabis tax rate from $14.96 to $13.09.
These new tax rates took effect on May 23, 2024.
Long Beach Municipal Code Section 3.80.261
Pilot Tax Credit Program
On April 9, 2024, in an effort to stimulate growth in the local cannabis industry and promote community benefits, the City Council approved the Cannabis Tax Relief Plan which included a 1% cannabis tax reduction (or equivalent) for cultivation and adult-use retail businesses (as noted above) as well as a Pilot Tax Credit Program, for a combined potential 4% of tax relief for qualifying businesses.
To qualify for the program and receive a tax credit of 3%, a cannabis cultivation or adult-use retail business must be in “good standing” and satisfy the eligibility criteria listed in the application. Businesses enrolled in a Special Circumstances Payment Plan may be eligible for the program after six months of proven payments. Tax credits will be applied upon remittance of quarterly or annual taxes and gross receipts reports, and other supporting documentation as required.
2024 Cannabis Business Tax Credit Application
Tax Rates
|
Type of Business |
Tax Rate |
|
Medical Cannabis Retail (Dispensary and/or Delivery) |
6% of Gross Receipts |
|
Adult-Use Cannabis Retail (Dispensary and/or Delivery) |
7% of Gross Receipts |
|
Medical/Adult-Use Cannabis Manufacturing |
1% of Gross Receipts |
|
Medical/Adult-Use Cannabis Distribution |
1% of Gross Receipts |
|
Medical/Adult-Use Cannabis Testing Lab |
1% of Gross Receipts |
|
Medical/Adult-Use Cannabis Cultivation |
$13.09 per Square Foot under Cultivation |
For cultivation facilities, the entire annual tax payment is due before issuance of the business license, except for Equity Businesses. Equity Businesses will be set up on a monthly payment plan.
For all other business types, once the first quarter has passed, the gross receipts for that quarter must be reported and remitted.
The tax rates could be increased or decreased, within the pre-established ranges specified in LBMC Section 3.80.261, by the City Council provided the maximum rates are not exceeded.
Vertically Integrated Businesses
Cannabis businesses are able to be vertically integrated, meaning that the same entity can control multiple stages in the production process. For example, a business can cultivate, manufacture, and/or distribute cannabis and then sell the cannabis in a retail store. Vertically integrated businesses must pay the cultivation tax (if applicable), the gross receipts tax for the end stage in their process, and the minimum tax for each business activity. A business is only vertically integrated if the same entity has a license for each type of activity. If the entity name is different but the owners are the same, this is not considered the same entity.
- Every cannabis business engaged in cultivation must pay the tax rate of $14.96 per Square Foot under Cultivation.
- You will be charged the gross receipts tax at the point of sale, or at the point the product leaves your business.
- All cannabis businesses shall pay a minimum tax of one thousand dollars ($1,000.00) annually.
How to Pay Taxes
Taxes may be submitted in- person or by mail to the Commercial Services Bureau. You must bring your bill, quarterly reporting notice (if necessary), and your payment when submitting taxes in person.
If you are paying in cash, you must make an appointment by calling (562) 570-5350. Please see the Paying with Cash section of this site for more details.
Gross Receipts Payment
After a business license has been issued, gross receipts shall be reported and remitted every quarter as noted on your billing statement to the City from the date the license is issued.
If the tax on your gross receipts, for any given quarter, is less than the minimum base tax of $250.00, you are required to pay the minimum amount.
Please remember that all retail, manufacturing, laboratory testing and distribution cannabis businesses must submit a quarterly report form, regardless of whether you had sales or are reporting zero sales.
Taxes for the most recent quarter shall be calculated and reported using the Reporting Notice which can be found on the back of the bill. If you have a balance forward (past due) for any unreported quarter, please submit a Reporting Notice and payment for each past due quarter separately.
If you have a credit on the account, that amount will be reflected on the front of the bill. Please subtract any credit from your gross receipts tax payment.
This policy has been put into place in accordance with LBMC 3.80.261 Subsections C(7), F and G.
Gross Receipts Reporting Notice
Gross Receipts Reporting Notice Online
Square Footage Payment
Cultivation businesses shall pay a tax rate of $13.70 per Square Foot under Cultivation. Square Foot under Cultivation is based off of the total maximum canopy the business will be cultivating as indicated on the business license application. Total canopy is the area of all live cannabis plants on the premises. Total canopy includes areas occupied by vertically and horizontally stacked canopies. Vertically and horizontally stacked canopies will have the square footage of each level calculated separately.
The square footage tax plus applicable fees, including BID fees, are due after the Certificate of Occupancy for the business has been issued by Development Services (for new applications) or once Development Services has updated the Certificate of Occupancy (for existing applications). The tax will be due annually thereafter from the date of business license issuance.
Example 1: A cultivation facility with 10,000 square feet of cultivation canopy on one level will be charged the annual cultivation tax of $132,000 for the year.
Example 2: A cultivation facility that vertically stacks 2,500 square feet of canopy on four different tiers or levels will have a total canopy of 10,000 square feet. They will be charged the annual cultivation tax of $132,000 for the year.
If your total cultivation canopy increases before your next bill is due, please notify us by calling (562) 570-6211 or by emailing cannabislicense@longbeach.gov.
Paying with Cash
If you are paying in cash, you must make an appointment by calling the City of Long Beach Commercial Services.
City of Long Beach Commercial Services
411 W. Ocean Blvd, Lobby Level
Long Beach, CA 90802
(562) 570-5350
Appointments are available Tuesday through Thursday from 8:00 am to 3:00 pm.
The business must identify the person who will attend the appointment. This person must be the same person dropping off the payment. The person dropping off the payment must bring a valid government issued ID to the appointment.
You must have all forms completely filled out prior to coming to your appointment. If you are paying your Gross receipts tax, you will need the Quarterly Reporting Notice for all quarters due filled out in it's entirety.
Please read all language on your bill! Please schedule your appointment well in advance of when your bill is due so that you do not accrue penalties for late payment.
It is the applicant's responsibility to schedule an appointment in advance of the due date. If the next available appointment is after the due date, penalties will accrue. Penalties will not be waived if the payment is accepted past the due date, regardless of circumstances.
Penalties
Any individual or entity who fails to pay the taxes required by LBMC Section 3.80.261 within thirty (30) days after the due date shall pay in addition to the taxes a penalty for nonpayment in a sum equal to twenty-five percent (25%) of the total amount due. Additional penalties will be assessed in the following manner: ten percent (10%) shall be added on the first day of each calendar month following the month of the imposition of the twenty-five percent (25%) penalty if the tax remains unpaid; up to a maximum of one hundred percent (100%) of the tax payable on the due date. Receipt of the tax payment in the office shall govern the determination of whether the tax is delinquent. Postmarks will not be accepted as adequate proof of a timely payment.
| Past Due | Penalty |
| 30 Days | Tax + 25% |
| 60 Days | Tax + 35% |
| 90 Days | Tax + 45% |
| 120 Days | Tax + 55% |
| 150 Days | Tax + 65% |
| 180 Days | Tax + 75% |
In the event a cannabis business ceases providing business license returns and taxes to the City for two (2) consecutive reporting periods, the City Manager shall send notice to the business demanding such reporting and payment and if no such reporting and payment is received within fifteen (15) days of the notice, the City may proceed with revocation of the business license pursuant to LBMC Section 3.80.429.
State Taxes
For information regarding taxes collected by the State, visit the California Department of Tax and Fee Administration.
