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Cultivation Tax Rates in Canix

Natalie M.
  • Updated

Canix makes Sales Orders simple by calculating cultivation tax for you! 

Our system is designed to automatically calculate cultivation tax on your packages based on the item type. Example, flower, leaf, fresh, etc.

Rates will vary depending on your local and state regulations.

  1. View the Cultivation Tax Rates
  2. Edit Cultivation Tax Rates
  3. FAQs

View the Cultivation Tax Rates

  1. Navigate to an open Sales Order
  2. Click the box next to Subtract Cultivation Tax from Order
  3. Cultivation Tax will appear on the right-hand side of the Sales Order under Delivery Fees
  4. Click the blue text Cultivation Taxes, and a pop-up will appear

Example, California Cultivation Tax Rates

California_Cultivation_Tax_Rates.png

 

Edit Cultivation Tax Rates

  1. Navigate to Inventory > Packages > Active
  2. Click the blue package tag number, a pop-up will appear that contains the package details
  3. Scroll to the bottom of the details pop-up
  4. Click into the Cultivation Tax text box and edit as necessary

Active_Package_Cultivation_Tax.jpg

FAQs

How does Canix calculate Cultivation tax?

In Canix, as in Metrc, pounds round to the nearest 10,000th decimal when converted to grams: 1 pound = 453.5924 grams

See here for our full weight conversion data.

How do I remove or add cultivation tax to a sales order?

Add_or_Remove_Cultivation_Tax_from_Sales_Order.png

 

How does cultivation tax, transfer, or get split to new item types?

Canix will automatically split the cultivation tax appropriately based on the following examples.

Examples from the California Department of Tax and Fee Administration:

Example 1: A cultivator sells five pounds of dried cannabis flowers and three pounds of dried cannabis leaves.

To calculate the cultivation tax, the weight must be converted from pounds to ounces. There are 16 ounces in a pound.

  • 5 × 16 = 80 ounces of dried cannabis flowers
  • 3 × 16 = 48 ounces of dried cannabis leaves

This example assumes the cultivation tax rates of $9.25 per dry-weight ounce of cannabis flowers and $2.75 per dry-weight ounce of cannabis leaves can be applied to the number of ounces in each category.

  • Tax on flowers (80 × $9.25) = $740
  • Tax on leaves (48 × $2.75) = $132
    • Total cultivation tax due = $872

Example 2: Using the same figures as provided in Example 1 above, you use the five pounds of dried cannabis flowers to make 250 grams of cannabis oil. The 250 grams of cannabis oil are placed into 500 vape pen cartridges. Each vape pen cartridge contains 0.5 grams of cannabis oil. You transfer or sell 300 vape pens to distributor A and 200 vape pens to distributor B.

To calculate the amount of cultivation tax that would be passed along to each distributor, you must determine how much cannabis tax is associated with each vape pen cartridge. First, divide the $740 of tax on the cannabis flowers by the 250 grams of cannabis oil produced. The amount of tax associated per gram of oil is $2.96 ($740 / 250).

Next, divide the $2.96 of tax per gram of oil by two, as each vape pen cartridge contains only 0.5 grams of cannabis oil. The amount of tax associated with each vape pen cartridge is $1.48 ($2.96 / 2).

  • Amount of tax passed along to distributor A ($1.48 × 300) = $444.00 
  • Amount of tax passed along to distributor B ($1.48 × 200) = $296.00 

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