Many CRBs engage in more than one type of business (also known as “vertical integration”). For example, a local business may be engaged in cultivation, manufacturing, distribution, and delivery. Each of these business activities requires its own County Business License and must report the 6% CBT with a separate tax return for each business activity.
Under current ACTTC policies, vertically integrated transactions, where the cultivation business transfers cannabis to one of their other vertically integrated businesses, must report these transactions on the ACTTC form for Cannabis Cultivation. In addition these Cultivation returns must also be reported to the California Cannabis Authority (CCA). This can be done using a CCA approved 3rd Party Software Providers or by manually uploading your information in the required CCA format by completing the monthly pricing data spreadsheet (CVS format) and upload it to CCA at the same time you complete your monthly Cannabis Business Tax (CBT) return form. Please note, ACTTC policies are subject to change and reporting requirements for vertically integrated transactions may be established in the future for other CRBs besides cultivators as additional track and trace information becomes available to the California Cannabis Authority.
Example: Assume a cultivator has gross receipts of $15,000 for sales of cannabis to third-party businesses. In addition, the cultivator also transfers 500 pounds of Outdoor-grown cannabis, 200 pounds of Indoor-grown cannabis, and 25 pounds of “trim” cannabis to a manufacturer under the same ownership (a “vertically integrated transaction”). The Tax Collector will supply the current wholesale price from the California Cannabis Authority or other third-party source. The reporting form should be completed as follows:
Note: do not include actual receipts from internal transactions in Gross Receipts (Line 1), unless they are greater than the Calculated Receipts (Lines 2), in which case those transactions should not be included as part of the Calculated Receipts (Line 2).
Please contact the Tax Collector’s Office if you have questions about completing your CBT Return form.